We are short Aussie from current levels of 0.7895. If you are in this trade with me, be sure your stops are in place because there is heavy economic data coming out of Sydney tonight. Starting at 00:01 GMT, or 7:01 p.m. ET, is Westpac business survey, then at 00:30 GMT, or 7:30 p.m ET, is Q3 Current Account Deficit and Public Demand. If you are in front of your trading station, please stay tuned to the Forex Insider to get the up to the minute data releases from our trade desk.

The chart below shows a direct correlation between Australian dollars and the gold market over the past six months. The break above yearly highs in Aussie, however, is not being confirmed by gold following similar suit.

In fact, gold is at my favorite Fib retracement, 78.6%, a hair above $650-oz. RSI is diverging, which indicates price momentum to the upside is slowing. If gold fails at the current levels, the case for relief of extremely oversold dollar becomes that much stronger.

I am offering another half position of Aussie just above the figure with stops above 0.7915 trying to get a gap limit fill on an over reaction to economic data. I would not recommend being in this trade if you are not prepared to use stops during these data releases.

Daily and Weekly Pivot Points

Todd Gordon is a Technical Currency Strategist and Fund Trader with GAIN Capital Group.

Disclaimer
The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.