On a daily timeframe, the Australian 200 Index has broke below the 1/1 GANN signaling a bearish bias. This is the same bias that entered the market when the 5-31-16 GANN 1/1 led to a -700bps clear.
Updated* 8/31/16 AUS 200 Extending below 1/1 GANN (blue) with more downside compared to last chart.
On a forex perspective, the AUD/USD (Commodity Currency) pair has been crushed due to dollar strength.
Brian Perry explains what a commodity currency is:
The commodity currencies are currencies from countries that possess large quantities of commodities or other natural resources. Natural resources often constitute the majority of the countries’ exports, and the strength of the economy can be highly dependent on the prices of these natural resources. Countries that are rich in natural resources include Russia, Saudi Arabia, Nigeria and Venezuela. However, the currencies of many natural-resource-rich countries are either regulated by the government or otherwise rarely traded in international markets. Therefore, commodity currency trading typically focuses on three countries that are rich in natural resources and also have liquid, freely floating currencies: Canada, Australia and New Zealand.
The Bloomberg commodity index fell for the 5th day in a row with all 24 major commodity futures in the red today.
Summary: It’s a tough time in the neighborhood for commodity rich countries as the dollar strength picks up again.