Long AUDS: bullish breakout on AUD/USD AUDS stock is poised to take off.
The AUD/USD bullish trend will continue for the next few weeks.
AUDS
- Fund is leveraged 200-275% with 100% asset allocation on AUD/USD
- Global shutdown AUD/USD appreciation meaning first time AUDS can produce positive returns
- AUDS 1 month return of 13% beating index of 6%
- AUD/USD poised to take off
- 20 day MA crossed over 50 day and 200 day meaning bullish trend
- 20 day MA now support
- Big price jumps in light of AUD/USD rally
Fundamentals on reference asset AUD/USD
AUD:
- Recovering domestic economic data ie good PMI's, strong consumer confidence, better than expected retail sales for May, lockdowns ending sooner than expected
- Rising commodity prices ie iron ore hitting $100/tonne, iron ore supply shortage in Brazil and Australia, copper prices up 20% from March low
- Strong demand for commodities ie China infrastructure spending accounting for 20-25% of steel demand, strong CAIXIN PMI's suggest rekindling of industrial demand
- Rate hold by RBA to appreciate AUD
- "Risk-on" sentiment ie plunging DXY , gold trending sideways, US10Y yield is up, major indices (US500, FTSE 100 , ASX 200 , Nikkei) rallying
USD:
- US riots ---> extend lockdown, could start second COVID-19 wave ---> devaluing USD
- US-China tensions ----> less demand for USD, risk losing phase-1 trade deal ------> devaluing USD
- Incoming hurricane ----> could impact shale industry meaning more unemployment resulting in deflation ----> devaluing USD
- Incoming economic data -----> weekly jobless claims to climb to 1.8 million, sluggish retail sales ------> devaluing USD
