Australian Dollar Futures (CME.AD) dropped 1.6% during Tuesday's session, its sixth successive decline. AD closed the day at 91.03¢, just slightly higher than its intra-day low. The recent bearishness has resulted in AD closing below its lower Bollinger band (20-day, two standard deviation bandwidth) for the third day in a row. Is it time to recover and bounce off the bearish bands?
Q: How has CME.AD performed in the past, omitting repeat occurrences within 10 trading days, when during the third quarter, it closes below its lower Bollinger band on threes successive trading days?
A: According to the 10 previous occurrences of this event, EventEdge indicates that CME.AD has shown a strong bullish edge that peaks 13 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Tuesday, August 5, 2008) is Friday, August 22, 2008.
CME.AD rallies in 100% of the cases (10 of 10) by an average of 1.8% relative to the close on the event date. Which, based on the close of CME.AD on the event date (91.03¢), provides a target price of 92.67¢.
To view this idea in our EventEdge analysis tool click here. Also take a look at a bullish Redux story on AD just published on the site yesterday by clicking on the link below.
Ronish Patel is an analyst with MarketHistory.com.
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Australian Dollar Futures - Bottoms Up Redux - August 4, 2008
