The most recent hike in Australian Dollar and one of it’s side effects were on display today with the ASX Listed Gold Miners.
Same side effect of the rising AUD may also be applicable to other ASX listed companies with the USD earnings.
I am having a look at the Commodity Gold and the XAD ( Australian Dollar Index NYSE) Ratio Analysis Chart to see what our TA may be telling us ?
It is clear that at the last NYSE trading session a SOW ( Sign of Weakness Candle/Bar) emerged in the ratio analysis of Gold vs XAD ( Australian Dollar Index).
That sign of weakness bar had definitely made its presence felt today with an above average falls in ASX listed Gold Stocks. An overbought condition had been in effect for a little while with the XGD ( ASX Gold Sector) and the trigger for it’s heavy pullback today may have been the rise in Australian Dollar.
RSI at the bottom window also dropped below 50 for the first time since the breakout on 5th of Jan. A caution with this sector may also be warranted at present, because of a further potential rise in the AUSSIE DOLLAR.
Chart is Courtesy of StockCharts.com
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