AUDUSD setting up for Aussie strength and Dollar weakness as we head into RBA next week. This is what I was referring to in the EURUSD post. We can’t buy AUDUSD and sell EURUSD. This trade setup tells me that EURUSD is probably not going to move lower – at best sideways off of a weak Euro and a weak Dollar, though a lot depends on the choice of the Fed chair today and NFP on Friday. So how would one know which trade to favor, because you can’t have both. If Dollar is weak I favor long AUDUSD due to the carry. If Dollar is strong I favor short EURUSD due to the carry. So to determine what the Dollar is doing I just have to keep an eye on Dxy and Gold.

AUDUSD Daily

MM2 - MM4. Look at that loaded stoch.

AUDUSD H4

Double bottom at WM2/ MM2 with a higher high. We could get a little higher and come down off WM3. 0.77 marks the support.

AUDUSD M15

Notice how price has broken out of a range on M15. 0.77 marks the support. SL below WS1 and TP at MM1/ MR2. Due to the possibility that this could fail due to Bears selling at MPP, adjust the lot size accordingly.

Gold Daily

Price opened in the bullish zone. MM2 - MM4. Though Bears selling at MPP or MM3 want to take this down to MM1/ MS2.

Gold H4

We got the double bottom we were looking for in a post earlier this week though what's up with that lack of a higher high above MPP... What happened to the Bulls. This double bottom is not confirmed. I want to see a proper higher high before I look to buy the pullback. More importantly, I want a proper higher high before I am happy to confirm that Dollar is indeed weak. Therefore I am keeping an eye on Gold while paying attention to all my Dollar setups.

Gold M15

Not feeling very bullish though not feeling very bearish. Seems pretty sideways to me. Let Gold be your canary in the coal mine.

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