Australian dollar futures (CME.AD) gapped down on Thursday, opening the session -0.7% lower than Wednesday's close. AD saw little movement in price, closing at its opening price, .9533, which was also the low for the day.
AD has been in a steady uptrend over the last two months, trading below .90 at the start of April to over .96 towards the end of May. The uptrend has been so significant that a five-day move of -0.6% on Thursday was considered a 'large' decline. Will the bullishness resume after the drop?
Q: How has CME.AD performed in the past, omitting repeat occurrences within 10 trading days, when, during the second quarter, it opens and closes the day at its intra-day low price?
A: According to the eight previous occurrences of this event, EventEdge indicates that CME.AD has shown a very strong bullish edge that peaks 10 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Thursday, May 29, 2008) is Thursday, June 12, 2008.
CME.AD rallies in 100% of the cases (8 of 8) by an average of 1.4% relative to the close on the event date. Which, based on the close of CME.AD on the event date (.9533), provides a target price of .9666.
Note: This event took place earlier this month, and 10 trading days later AD was up over 2%.
To view this idea in our EventEdge® analysis tool click here.
Ronish Patel is an analyst with MarketHistory.com.
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