AUD experiences temporary pullback as gold prices life off
AUDUSD has been in a counter-trend move since September, 2015. An early indication that selling pressure is dying down is by fractal counting.
As you can see, this pair failed to make lower lows from September and onwards. I currently believe it is too early to tell if this trend is over, but I highly doubt it. From my moving average settings, they have converged with the 60-period meeting the 120-period. This is the first indication that we may be looking at an upwards wedge breakout. I still remain bearish over the long term. Why?
Given that Australia is major commodities exporter and gold has taken a hit, the upside remain very limited for the Australian Dollar.
If we were to compare the performance of gold against on the weekly chart, there has been a strong correlation and leading indication showing how gold projects the Australian Dollar's next move.
As you can see, gold has been an early predictor for every major move for the Australian Dollar. Gold tends to rally a few days before that of AUD and the recent lift-off in gold is giving the Australian Dollar the wedge that it is trading in right now. My current trading plan is to buy into the upwards wedge breakout, but I will resume my long term short position at a higher, optimal price.
As you can see, this pair failed to make lower lows from September and onwards. I currently believe it is too early to tell if this trend is over, but I highly doubt it. From my moving average settings, they have converged with the 60-period meeting the 120-period. This is the first indication that we may be looking at an upwards wedge breakout. I still remain bearish over the long term. Why?
Given that Australia is major commodities exporter and gold has taken a hit, the upside remain very limited for the Australian Dollar.
If we were to compare the performance of gold against on the weekly chart, there has been a strong correlation and leading indication showing how gold projects the Australian Dollar's next move.
As you can see, gold has been an early predictor for every major move for the Australian Dollar. Gold tends to rally a few days before that of AUD and the recent lift-off in gold is giving the Australian Dollar the wedge that it is trading in right now. My current trading plan is to buy into the upwards wedge breakout, but I will resume my long term short position at a higher, optimal price.