Eoin Treacy's view The strength of the commodity sector which continues to represent some of the best performing Australian companies has helped push the Australian Dollar to 40-year highs against the US Dollar. This has put considerable pressure on the domestic economy. Let's look at some examples.

The S&P/ASX 200 Index broke downwards from its almost two-year range last week and found at least short-term support this week. However a sustained move back above 4670 will be required to check medium-term scope for additional lower to lateral ranging.

The S&P/ASX 200 Financial Index has more of a downward bias and also broke lower last week. Commonwealth Bank of Australia (9.41%), Westpac (10.47%), ANZ (9.9%), and National Australia Bank (10.08%) all share a similar pattern. We would welcome some feedback on whether payouts at these levels are sustainable?

Shares such as David Jones (16.84%), Myer (15.38%) and Billabong (8.16%) which either depend on the domestic economy or have to compete abroad in the highly competitive retail sector have been among the worst performers of late. David Jones has become deeply oversold and potential of a short covering rally has increased substantially. Myer is quite similar. Billabong has been deteriorating for a year and a sustained move above the 200-day MA, which would subsequently need to turn upwards, would be required to question downside potential. The dividends for these companies appear unlikely to be sustained.

As with other countries the strong cashflows of telecoms make them attractive in times of crisis. Telstra (13.11%), which has been a serial disappointment for many, surged this week to form a large upside weekly key reversal. A countermanding downward dynamic would now be required to question recovery potential.

In the commodity sector, closely held Coal & Allied (3.16%) surged this week. A sustained move below A$100 would be required to question medium-term scope for some additional higher to lateral ranging. BHP Billiton pulled back to test the A$35 area and a short covering rally appears to be getting underway. It will need to find support above this area to suggest a medium-term low has been reached. Rio Tinto has a similar pattern. Newcrest Mining is among the best performing gold shares, particularly when currency differentials are taken into account. It continues to range above A$35 and a sustained move below that level would be required to question medium-term scope for additional higher to lateral ranging.

The heightened sense of anxiety evident over the last week has exaggerated the differences between Australia's world-beating commodity sector and much of the rest of the economy. This is unlikely to change for as long as the Australian Dollar remains at such high levels. It found support in the region of $1 this week and a sustained move below that level would realistically be required to question the potential for additional upside over the medium term.