Further AUD strength and USD weakness anticipated

The Aussie has behaved exactly as anticipated. AUD appreciated across the board reaching a high of 9090 against the buck (from 8918 in the last post when going long was advised). Last night's labor reports underpinned the aussie as unemployment dropped and the number of jobs created increased as well. The Australian economy is getting a firmer footing and if we continue to see positive news releases we may very well get another rate hike before the year end. The yield differential between the AUD and the rest of the world (especially the USD) will widen further and this should propel the AUD higher. The second recommendation to buy EURCHF at 5100 also worked out very nicely as we are trading at around 5180.

The greenback was sold across the board today and the USD index looks really poor. The price broke below all major support levels and unless we trade back above 76.50 the bias is clearly down. The USD is collapsing practically against all majors. All charts have important moving averages (10, 50, 100 or even 200 hour) stacked in a "correct" order pointing to strong momentum and further USD losses ahead. CHF parity anyone?

Spot gold reached higher levels again and one must ask whether oil will follow and break out of the relatively narrow range where is has been stuck for many months now. Again, if oil breaks out higher, the USD will continue its rapid decline.

As far as trading: do not fight the trend (at least not yet...) and do not buy the USD yet. The time may come but not now. So continue to sell USD on strength (test of 20 ema on hourly chart) preferably against fundamentally stronger currencies like the AUD.