Gold Fails At 1330.0: Whipsaw Trading In The AUD/USD

The gold markets have been chaotic today, featuring a failure at the 1330.0 handle. Earlier, April gold futures posted an intraday high of 1335.0 before entering a correction. The AUD/USD followed suit, failing to sustain trade over .7900. So, where is the Aussie heading? Let’s take a look at the current market dynamic for some clues.

Trading the Aussie is always a challenge due to its relationship to the gold market. Today’s lagging U.S. Retail Sales brought buyers to the market for the AUD/USD, but the intraday gold correction has stifled the rally. In the event that price comes off a bit more, a long setup from downside support may be in the offing.

AUD/USD Technicals

At press time, the AUD/USD is trading in the center of the session range slightly above several key support levels.

In trading, the convergence of technical levels is a great thing. These levels of downside support are in a tight area, lending credence to their potential validity:

• Support(1): Daily SMA, .7846
• Support(2): 20 Day EMA, .7841
• Support(3) Bollinger MP, .7843

Bottom Line: My intermediate-term technical bias to this market remains bullish. A long from just above the Daily SMA at .7851 with an initial stop at .7824 yields 27 pips using a 1:1 risk vs reward management plan.

Having three support levels in such a tight proximity provides an attractive trade location to the bull. In the event that we see a challenge of the intraday low at .7851, this trade will have a chance to go live and produce a few green pips for the trading account.  

ABOUT THE AUTHOR See More

Shain Vernier

US Analyst

Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.

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