Last night’s Aussie Dollar weakness brings ASX stocks with large overseas investments into focus. A weaker currency improves the $A value of both their profits and investments overseas
Building products company, James Hardie falls into this category. About 77% of its sales are in the US and Europe.
In these days of low volatility and relatively shallow corrections, the 38.2% Fibonacci retracement level has been the final destination point for a lot of stock market pull backs. After a miss with its latest quarterly profit result, the James Hardie share price is showing signs of forming a base around the 38.2% retracement level.
Short term traders will be aware that Aussie is approaching a potential support zone. This is formed by the 200 day moving average and the 38.2% retracement of the rally from .8660 to .9182. This support cuts in around .9180. Even so stock prices are about medium term big, picture changes in the currency and many are now calling the Aussie lower.
James Hardie shares at support