Calling lower commodity prices

AUDUSD is making a new lower low.

It could trade up to 0.7082 – 0.7135 in next days, however I’m preparing for a next lower leg where 0.6780 is the next stop.

In turn, following a little pop to 260.50, the Thomson Reuters CRB Index should also turn lower.

This scenario bodes poorly for the broader commodity complex, with energy, agricultural’s and industrial metals at greatest risk to declines.

Beyond this, ponder your exposure to producers/miners/drillers/growers of such commodities.

Inversely, lower input prices will benefit those end product ‘manufacturers’.

And I’ll look to sell USD/buy AUD at lower levels.

January 31, 2022

by Rob Zdravevski

rob@karriasset.com.au