Dear David, RE: USD/AUD + Gold Chart Overlay As always I find Eoin and your daily commentary incisive, and well informed. As to my above subject. The above long term chart overlay AUD/Gold just the last 3 months has diverted whereas the last 5 years it has generally been in Sync. Furthermore comments in the local financial press are calling the AUD down to USD-.70. Based on the technical evidence do you agree with these comments or do you see the sharp downturn over the last few days as a trend ending move? I would appreciate your comments. Kind Regards, 

David Fuller's view

Thanks for your thoughtful comments and a topical email. I am not sure I fully understand your question but will take a shot at it.

In the short term, gold is temporarily overextended and due for a consolidation.  More importantly, it appears to have broken its previously bearish trends, first against the weaker AUD and more recently in USD terms.  Meanwhile, the weak AUD has fallen a long way against the strong USD.  Nevertheless, I see no evidence that this decline is over, so unless the Fed gets cold feet over USD strength, I see no reason why AUD could not fall closer to USD 0.70.