Gold (XAU/USD) reversing? Trading short on CAD/JPY, AUD pairs are higher on RBA hews [Video]

This morning the Reserve Bank of Australia raised Interest Rates more than expected, sending AUD flying.

This morning the Reserve Bank of Australia raised Interest Rates more than expected, sending AUD flying.

But can we trade this?

Be careful as price action has moved WITH the current short-term trend.

For example, on AUDCHF on the daily chart, we can see that price action has broken through the upper trend line.

This has happened with most AUD pairs except AUDCAD where price action could not break resistance at $0.895.

We pointed out yesterday that CAD is the strongest currency but before going short on AUDCAD, wait for confirmation from your technical indicators and perhaps your favourite oscillator.

Speaking of CAD, we promised to look at CADJPY.

On the daily chart, we can see this rising wedge with price action heading into a key level at 104.7 yen.

We need a few things to happen before we sell this pair.

We need the Bank of Japan to think about raising Interest Rates; we need the Stochastic Oscillator to stop looking so bullish; and we need the price of oil to fall a bit.

So, on Brent Crude we see that price action has filled the gap that we spotted yesterday but it looks like a ranging market with the Stochastic Oscillator showing oversold.

However, if we move out to the daily chart, we see a different story with a clear downtrend into this Descending Triangle with this level of support at $72.

Last week we postulated that the bear run on Gold might be coming to an end.

We still see a bit of downside with a gap to fill from yesterday and an overbought signal on the Stochastic Oscillator but…

On the daily chart we still have some upward bias but, as usual, wait for confirmation.

But, be careful as, if the Fed decides to raise Interest Rates again, a long on Gold might be the wrong call.