Commodity prices are on the rise. Copper and oil are stand out performers, but lead zinc and nickel have all joined the party. Iron prices are stabilising, albeit at lower levels, but thermal coal prices are up almost 50% since the May 2017 low. This co-ordinated rally in industrial commodities not only indicates a better global outlook, it also flags support for the AUD.

In contrast Europe may be experiencing the after glow of a significantly lower EUR. In my view the EUR rally since March is imperilling growth. Stubbornly low wages, employment and consumer activity suggests much of the boost came from external sources. This export led recovery is in danger with the EUR 15% higher against the USD. The stance of the ECB remains staunchly accomodative, possibly reflecting caution over near term prospects. A weakening EUR is important to the continent.

Sell EUR + buy AUD = sell EUR/AUD.

This is where the chart comes in. Note the daily uptrend line. A fall below 1.5090 would break the trend, potentially flagging a fall. Traders with a shorter term focus may target levels just above support around 1.4800. Swing traders may prefer to wait for a test of the 1.4800 level, as abreach would signal a new longer term downtrend.