David Petrunic's Page

The following 3 charts should be looked at as maps of larger to lesser scales. Look at the largest scaled chart/map first and then notice how each smaller one highlights or zooms in on a smaller area of the preceding larger one in greater detail.See More

I wanted to tackle a new pair today and the AUD/CAD seemed like a fun pair to dig into. I started with the largest timeframe or the monthly chart and worked into a daily timeframe. I found some interesting patterns on both charts that I felt I should share. I want to watch this pair develop further but I am currently leaning on shorting the pair. The technicals are showing a bias towards the short side while the fundamentals are mixed..A practical way of looking at the two countries fundamentals includes looking at the countries primarily roles and there locations to growth. As close to China as Australia is; Australia is limited to air and sea transport while Canada also has rail and road. As the cost of everything rises, having additional transport options gives Canada an efficiency advantage. Australia’s advantage is that it is geographically closer to the growth powerhouse of China. The next couple of years, both the US and China are expected to decline there growth outputs. With China slowing there growth outputs, China will be better positioned to buy commodities at cheaper prices. This may force Australia to further compete and thus be forced to weaken there currency. Both countries are highly influenced by the "west" yet Australia is the furthest from the west. Australia’s geographic distance to the western world amid it’s close relationship to the western world carries more risk than “linked up Canada”. With a decent longterm fundamental picture in mind, we will be watching the technicals on shorter timeframes to confirm or disconfirm future trades.See More

The Big picture charts are now pointing down and the fundamentals for Australia still look better than Europe’s fundamentals so we will be looking for short setups in the near future. Stay tuned to our alerts and radio shows.See More