New York 10/14/09
Today the Dow has cracked the coveted 10,000 handle. While skeptical “experts” and the press reported all along that the rally which was occurring would be short lived. Besides the fact that I don’t trade off of anything I hear via media. I started looking at the commodities currencies aka risk currencies. The Australian Dollar and the Canadian Dollar, after the recent global financial meltdown of the recent past. These currencies against the U.S Dollar began to act as a barometer of a global economic recovery. Besides the belief that it is merely the production of the commodities these two nations produce.While in part true the real movement was flight to higher yields. The hunt for performance via assumption of risk, the crystal ball for the S&P 500 and most global equities was seen when the Aud-Usd closed above the .7700 level on a weekly basis( 5-17-09). While we saw a choppy summer the Aud-Usd led the way with its’ higher rates. Then the revelation that the land down under had escaped the clutches of the worst global recession in recent memory.All the while the equities chugged along higher. But the ultimate insult to US Dollar injury was when the RBA became the only G-20 country to raise rates the Aud-Usd rocketed higher, and then eight days later U.S equities made highs that haven’t been seen in over a year and which many believed would never be seen again in fifty years. Now If that isn’t a leading indicator, I don’t know what is, when will the rally end? I can’t tell you but the Aud-Usd probably can.
By David A Moore
Tags: AUD/USD, Aussie, Baron Fx, breakout, bullish, David Moore, Dow, ECB, economy, eur, Foreign Currency Trading, forex pick, G-5 currencies, institutional, Market Depth, moving average, oversold, pivot numbers, pivot points, Precious metals, R1, R2, R3, RBA, resistance, S&P 500, support, Tim Geithner, traders