Market pauses for AUD data

1 November, 2016

It's a big day for the Australian economy as it continues to find movements from fundamentals rather than technical's. In this case, the cash rate statement and the rate statement are likely to take centre stage for the AUDUSD. Many had expect the Reserve Bank of Australia to hold back in the short term, as it has been unclear if the Australian economy will recover on the back of the boost in commodity prices in the metals sector. For myself it seems like it will, but it seems all the more long term rather than short term, and this will lead to issues in the short term as many Australians expect positives rather than negatives from the uptick in commodity prices. With Capex decreasing and employment looking more repressed than ever the Australian economy continues to struggle and it's likely to remain that way.

The AUDUSD on the charts has tried to remained bullish in the short term, but the bears are starting to take control. Every wave has so far been much weaker, and I expect that to continue in the long run. The 100 day moving average has acted as dynamic support in the past, and is likely to remain that way as well. Many are expecting any further resistance higher to occur at 0.7616 and 0.7643 which have held out against further movements higher. But it's also worth acknowledging the bullish trend line that has been in play for some time, and is likely to hold up any further movements lower, so AUDUSD traders will be taking stock of this trend line and the potential it has to ruin the bears day.

It has been a topsy turvey day for gold markets as they continue to buck the trend and look to climb higher on the back of political risk which continues to be a major force for US traders. Many are expecting a democratic victory, but with the uncertainty at hand some are wondering what the next step may be. So for gold markets this has been somewhat of a bullish market as of late, and in the fact of positive economic data and interest rates likely to be pushed higher.

Gold has previously failed to break below support at 1249 after repeat attempts, and this looks to be a strong level despite what many are saying. I would expect gold to trend higher in the short term above resistance at 1295 as US political risk increases and the election continues to find itself under further pressure from outside sources. Further levels higher for resistance can be found at 1323 on the charts.


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