The Australian dollar is looking very appealing to traders in today's market as it continues to find itself finding large amounts of volatility on the back of commodity woes and the Chinese slowdown; ever present and hard to lose sight of. The upcoming NAB business confidence is a key mover though, and this is also followed by CPI q/q which is expected to be marginal at best when it comes to inflation pressure in Australia, and may give the Reserve Bank of Australia (RBA) the chance to look at cutting interest rates from the present 2.00%. Whatever the outcome the fiscal situation in Australia continues to look worse and worse and more so the global market threats are very much real which in turn will put pressure on the RBA.
Chart wise the AUDUSD continues to be very volatile and big swings are nothing out of the ordinary at present. Resistance levels have also looked quite strong as market sentiment seems to be in favour of the bears at present, and so 0.7022 is looking like a very strong level and many are expecting 0.7105 to also hold up as well in the market. Certainly if we saw positive news it might be hard to contain the AUDUSD, but 0.7105 would provide serious resistance in the current market climate. Support can also be found at 0.6906 and we could see a genuine test if the market has reason to move.
Gold has been gaining further in the recent weeks and it could extend further in the current market climate. Investors have been turning to the precious metal in the wake of the Chinese slowdown and the market is likely to look for further safety. The question really is can gold provide the safety that was previously there during the Global Financial Crisis - in this case I think not at present as investors have yet to turn a blind eye to the market and look for safety, instead, the market is looking for opportunities and right now gold provides one in the short term. US markets continue to impress and as they do so gold's lustre will continue to waiver - only a large scale movement economically would really shift back into the heavy buying spotlight we saw almost 8 years ago.
Ordinarily on the charts we could expect big movements, in the case of gold the bulls look to be taking control of the trend and so far the 20 day moving average has acted as dynamic support for any movements lower. This is the key area here for a lot of traders and many will be watching gold as it pushes down, in this case any touches could be treated by buying opportunities for traders, but gold also has a strong history of ignoring the moving average at times. The next major resistance level is at 1141 and the market will most certainly like to touch there before letting go of the current trend.
Oil is also one market to watch as a last note, as the build up shows 11.4 million barrels in the American market, as a result the figures due out this week will be very interesting to watch to see if that is the case.
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