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The Trend of the Day - AUD/USD

The Trend of the Day - AUD/USD

Gregory McLeod, Currency Analyst

gold has fallen from its all time highs. Oil and Gold are two commodities that move in the opposite direction of the dollar. AUD, NZD, and CAD are called the Commodity Block of currencies.
Since these areas of the world are rich in natural resources, their currencies are highly sensitive to price movements in commodities. As gold has moved up, The Aussie Dollar has moved up as well. When gold has fallen, then the Aussie has suffered as well. 
These moves can give us some indication how to trade these currencies. Gold has tumbled from its highs around $1200 and ounce. Also, the Australian GDP numbers were half of what was expected.  We can expect a lot of profit taking going into the en of the year as traders who were long are taking profits.On the technical front AUD/USD has broken through weekly support in the .8900 area after reaching a yearly high on November 20th of .9404.The weekly MACD histogram has given us an indication that the trend is changing from up to down as we have two bars appearing below the horizontal zero reference line. Look to enter at market with a stop above .9206 to target .8100 which is the 38.2% retracement of the previous up move. You may have to drop to a smaller time frame chart to find a tighter stop. AUDUSD SHORT 12.17.09

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.