Before I layout the reasons behind trading Gold CAD and AUS on the long side, i want to note I am bullish on china and oil currently but the trade was missed on these. I do not chase trades, it is not the way to play, i have learned this over time. The market will give you beautiful trade setups if you are patient.
The Gold CAD and AUS charts look nice for a long setup. I am currently short the EURO. I think last weeks currency momentum came from a weaking US dollar more so that strengths from other currencies. I think EURO is weak just wasnt as weak as USD last week.
My thoughts are that US dollar is an uptrend so we should expect surprises to the upside not the downside. I think there are a lot of players in the USD right now so it may be a crowded trade. I have been in the EURO short for months now and I think I may have to let it go.
I think of all the plays to make here I think Gold is largely dependent on the dollar and I dont like that. I think the CAD and AUS are correlated positively so the trade to make is gonna be the stronger of the CAD and the AUSSIE.
My models pick GOLD AUS and CAD as ripe for longs. Gold makes me nervous as mentioned above. I think I gotta go long CAD and AUS. AUS looks better shorter term when putting the crosses against eachother, CAD looks better longer term. So I want to diversify.
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