Another monthly chart — this time of the Aussie dollar against the greenback. The decline of the last 3 months found support at $0.94 before rallying to a high of $1.04. Breach of the rising trendline indicates that the primary up-trend has ended; confirmed by bearish divergence on 63-day Twiggs Momentum and reversal below zero. Failure of support at $0.94 would signal a decline to $0.84.
* Target calculation: 0.94 – ( 1.04 – 0.94 ) = 0.84
The daily chart shows consolidation between $1.01 and $1.04 over the last week. Failure of support at $1.01 is likely and would warn of a decline to $0.94. Breakout above $1.04 and the descending trendline is unlikely, but would indicate a rally to the July high of $1.10.
AUD Monthly chart is eerily like the gold chart at the moment – about to break the March 2009 trend.
XAU monthly chart still looks strong, so I wouldn’t bet against gold. Chairman Ben is just waiting for me to sell the last of my gold stocks before he launches QE3 and sends gold to $2500.
possibly the best time to purchase gold? au dollars still relatively strong, and should the aud fall and gold increase we get a double whammy?
Watch the dollar index: if that starts a primary up-trend, both gold and the AUD are likely to fall.