Australian Dollars leads the euro

Currency Technical Notes : Everything is bouncing counter-trend a little. The one that might have some legs is the Australian dollar, and don’t forget, for reason nobody can figure out, the Australian Dollars leads the euro. The slope of the linreg channels is too steep. It’s sensible for prices to correct to create new highs so that the slope gets to a sustainable angle. Conventional wisdom (from Gann) has it that 45 degrees is a good slope.

Separately, see the gold chart. Gold closed at $786, well under the channel bottom and on an opening gap down. We think it can bounce up strongly, to back inside the channel, even it turns out to be a dead-cat bounce. Gold is not important per se but some traders think it always has an inverse relationship with the US dollar. This is demonstrably stupid but never mind—if some people think it and others are trying to trade in anticipation of “the crowd,”

we will get gold up, dollar down, at least for a few days.

Bye for Now

Barbara Rockefeller

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