Commodity currencies - Big moves in sight

AUD/USD is in a topping process. I think we are looking at a S/H/S top and a break below the neck-line near 1.00 should trigger a big move to the downside. The S/H/S has a target at near 0.88, but the entire structure since 2001 is comming to an end (that will be a story for an other day) for now this will keep you safe.

Short term a break below 1.0311 will confirm the test of the neck-line at 1.00.


USD/BRL - The Brazilian Real has been on of the really big winners since late 2008, but every this has an end, so too has this rally for the BRL. We have already broken above the resistance-line of the ending diagonal and is in the process of building an inverted S/H/S bottom. A break above the neck-line near 1.6625 and a break here will open for a rally towards the 1.89 - 1.91 area.

USD/CAD - Is close to test strong resistance near 0.9970, but if we break above here the move higher should be huge and a rally towards the 1.08 - 1.09 area should be seen.
As the Chinese economy slows the demand for commodities in general will decline, but more importantly the speculative forces will change side and that will hurt the commodity currencies.

NZD/USD - Here too we are in a topping process. NZD normally is running ahead of the AUD, so I would expect this cross to break below its neck-line before the AUD/USD cross. The neck-line is near 0.7934 and a break below here will call for a decline towards 0.71 area, but as is the case for AUD/USD this cross too is ending the entire structure since late 2000 (this too is a story for an other day.

Short term a break below 0.8152 will confirm a test of the neck-line.

USD/ZAR - Finally lets take a look at the South Africa Rand. As can be see we have been cosolidating for more than a year now. When this consolidation comes to an end and we break out the move will be huge. Not long ago a said, that EUR/USD was like a boiler, where the steam was building. This is like a giant boiler and the pressure makes it ready to explode.

I'm looking for a break above 7.36 and a break above here will release the pressure and send us up to at least the 8.08 - 8.09 area in a hurry.