Currency Currents

Currency Currents

Wed, Apr 23 2008, 14:52 GMT

Black Swan Capital


This morning, for our Currency Currents Members, we delved upon the divergence between gold and the U.S. dollar. Ultimately, we feel this relationship could prove crucial to the direction the currency market takes now and a short ways down the road.

While correlations are fairly easy to spot, they never seem to be as easy to predict. It certainly isn’t child’s play, but it still seems a lot like follow-the-leader meets musical chairs. You have assets moving together (or apart) as expected until the music stops and everything goes it’s own way.

It’s when the music starts back up that we try to determine if things will pick up from where they left off – who’s following and who’s leading?

Gold and the Australian dollar had a tight positive correlation up until last month. Based on Australia’s economy and it’s exposure to gold prices, it’s easy to understand why the Australian dollar might be influenced by the yellow metal. But it’s not as easy to understand why it wouldn’t be ...

 AUDUSD v. Gold

Gold is moving lower as the Australian dollar moves higher on the verge of a major technical breakout.

What’s missing here? Is gold just a bit tired from its run to over $1000? Or is it telling us that the Australian dollar is somewhere it doesn’t belong?


Regards,

Black Swan Capital

Published on  Wed, Apr 23 2008, 14:56 GMT

Archive

Black Swan Capital LLC  | 2161 SW Racquet Club Drive Palm City, Florida 34990
http://www.blackswantrading.com | jcrooks@blackswantrading.com

Legal disclaimer and risk disclosure

Currency Currents is strictly an informational publication and does not provide individual, customized investment advice. The money you allocate to options should be strictly the money you can afford to risk. While every effort is made to evaluate the actual experience of subscribers, all performance figures must be considered hypothetical, and past results are no guarantee of future performance. Detailed disclaimer can be found at http://www.blackswantrading.com/disclaimer.html

Interested in forex trading? forex brokerage firms!


Forex Capital Markets, LLC (FXCM)
Contact the broker/FDM
Open a demo account
MG Financial Group
Contact the broker/FDM
Open a demo account
Crown Forex SA
Contact the broker/FDM
Open a demo account		CMC Markets Plc
Contact the broker/FDM
Open a demo account		Alpari (US), LLC
Contact the broker/FDM
Open a demo account

FXstreet.com will give you a 3 months membership as soon as minimum rebates have been generated (€150 for private trader/ €300 for corporate trader)

[Read Premium full description]


Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer.

Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management.

Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

©2008 "FXstreet.com. The Forex Market" All Rights Reserved.