I want to look at the Aussie dollar (AUD) today, which I’ve discussed has had an interesting relationship with U.S. equities (here and here). I often view the AUD as a leading indicator for what could happen in our own market here in the U.S. So not only is it important to know what’s going on in non-U.S. markets, we also must recognize the possible impact those markets have on our own.
It seems the Australian dollar has been trading in a rising channel, which it is currently at the bottom of. When turning our focus to the Relative Strength Index (RSI), we see it is also in a channel, which creates a negative divergence from price. I’ll be watching to see if price breaks out of its channel, will the RSI follow in breaking out of its own sideways action.
