AUD/USD Intermarket: Aussie lagging Gold but weighed by industrials

Currently, AUD/USD is trading at 0.7696, down -0.15% on the day, having posted a daily high at 0.7712 and low at 0.7695.

FOMC Minutes: Policymakers thought a rate hike "might be"appropriate "fairly soon"

AUD/USD was bid on the back of the FOMC minutes overnight that disappointed the greenback bulls given the vagueness around timings of a rate hike and conditions required for the next one to take place. Those speculating for a March hike have been let down by the previous rhetoric from Yellen that now seems overly optimistic in to respect the state of the US economy vis-à-vis a March hike. 

US dollar index erases gains after Fed’s minutes

However, the Aussie is someway behind the kiwi's rally today in percentage terms and indeed Gold was better bid making just over a $9.00 rally on the back of the Fed's minutes. However, Iron ore prices took a breather, down 0.6%.

Gold vs. US dollar; Comatose vs. 3rd '50-DMA' rejection

"The rally to the highest level since 2014 has occurred at the same time as stocks have been rising, which has caused some producers to question the sustainability of the rise," explained analysts at ANZ. "Fortescue’s Nev Power noted that “we’re seeing stocks increase and prices increase at the same time, which is very unusual”." elsewhere, base metals prices were also mixed. "Copper eased back, despite ongoing concern around the strike at BHP’s Escondida mine in Chile," explained the analysts at ANZ. Meanwhile, analysts at Westpac note that a successful retest of the 0.7730 level would then target 0.7780 (Nov high). "CAPEX today will be closely watched."

AUD/USD 1-3 month: 

The same analysts at Westpac are looking for the price to head lower to 0.7400. "The US dollar’s impressive post-election rally may have paused, but still has potential to rise further during the months ahead. The Fed’s assertive tightening bias plus US fiscal expansion should maintain upside pressure on US interest rates and the US dollar. Against that coal and iron ore are likely to sustain a good portion of their dramatic rises, and economic data for Q4 and Q1 should improve, but these forces are subservient to the US dollar’s trend. Australia’s AAA rating will remain an issue into the May budget. (23 Dec)."

AUD/USD levels 

Analysts at Commerzbank noted that last week, the market eroded the 2013-2017 downtrend and cleared the 0.7645 Fibo resistance and in doing so they say has introduced scope to the 0.7778/.7850 2016 highs and the 38.2% retracement. "Directly above here lies the 200-month ma at 0.7930. Very near term we would allow for a dip to 0.7595/15 ahead of further gains.

Gold levels

The analysts at Commerzbank explained that currently, they are neutral to positive above the 55 day ma at 1185 but are alert to the idea of profit taking at the long term moving averages. 

"Only a failure at the 1981 mid -January low will de-stabilise the chart and introduce scope for a retest of the 1123 mid-December low, but we look for longer term trend lines circa 1112 to hold the downside. This support is reinforced by the 78.6% retracement of the move from 2015 to 2016, this is located at 1116/17," explained the analysts, adding,The 200 day ma lies at 1263.08 and this guards the 1306.31 (the 5-year downtrend). Only a close above here would restore upside pressure."