Wow, gold is on steroids recently. It hit another fresh, all time high today. Right now it sits at $927 an ounce.
This is just one of the winds blowing against the dollar lately.
High gold, high oil prices, lower New Home Sales, the thought of more Fed rate cuts coming as soon as Wednesday and possibly more to come after that....
Where does it end. The buck has held its own very well considering. However, it might go down to re-test its recent lows which are also 30 year lows too.
If so, look for the EUR/USD to go a bit higher as the "anti-dollar" follow's gold's lead.
Also, speaking of high gold and oil.....notice that gold is running off and leaving oil in the dust right now. The two had been a bit more neck and neck formerly.
Since Aussie's gold is shining much better than Canada's oil...the AUD/CAD pair is looking better once again after its recent pull back.
Australia may have to continue to hike rates too because of increasing inflation in the "land down under". However, Canada has already cut rates and will probably continue to follow the U.S. Fed's lead in continuing to cut rates. If so, this will give a yield (interest differential) advantage in the favor of Australia. So there's a pair to consider.
On top of all of the fundamental reasons...there's also a triangular sideways pattern that the pair is about to break out of. It looks like the Aussie is just about to win that "tug of war".
Check out the hourly, 30 day chart below. Click on it to enlarge it.
So look for Australia to win this battle.
Sean Hyman
Editor/Trader
www.money-trader.com
Comments