Today’s U.S. equities open has been predictably slow, with the indices off slightly. The real story is in commodities where gold and WTI crude are challenging key psychological levels. Is this a result of investors getting out of stocks and into commodities? This afternoon’s futures, equities, and forex close may prove very interesting.

The economic calendar for the U.S. session is bare, with the only reports of note being the upcoming Baker Hughes U.S. Oil Rig Count and Commodities Futures Exchange Commission (CFTC) net positions.

A bit earlier, the EU HICP number came in above projections. The release has been kind to the EUR, as it is continuing this week’s rout of the USD as well as posting gains against the Swiss franc and Japanese yen. If the Euro continues to run north for the remainder of the session, we may be in a position to look at shorts early next week.

AUD/USD Technicals

On the tails of bullish participation in gold, the Aussie is on quite the winning streak against the USD. Front-month gold futures have eclipsed 1305.00 for the session, great news for the AUD.

The uptrend in the AUD/USD is remarkable, dating back to mid December. Currently, price is very near the 50% current wave retracement (.7813) on the daily time frame. We could be in for extended rotation around this macro resistance level.

Bottom Line: Sometimes the analysis is simple. As long as gold rallies, the AUD will follow suit. Today’s close and next week’s open may bring more gold longs into the equation, driving price even higher. In the event that the AUD/USD continues the recent bullish trend, I will be selling the macro 62% retracement level at .7888.

Trade management will vary as the scenario unfolds, but a 1:1 R/R with an initial stop at .7906 generates 18 pips profit. Depending upon the market action, this trade may turn into a short-term position trade. As always, trade smart and watch your leverage!