Hi Menta. I'm not as experienced as some here so these are just my observations, glad to hear from others. I like to use volume in my charting so was looking at the DOW when I noticed the similarities with the AUD. The DOW being a good indicator of the world economy and Australia being a resource nation, hence the tie in. Also I just find the DOW easier to chart. I have no idea how far the DOW will move, but in my opinion it doesn't look good.
Bond yields in parts of Europe are around 7% (not good) Germany having difficulty auctioning their bonds (not good) Germany not letting the ECB print money (just kicking the can though, if they do) American politicians can't agree on spending cuts / taxes.
However the AUD has some things going for it Low government borrowings (relevant to other countries) Demand for Australian bonds. See link. http://www.theage.com.au/business/australian-bond-boss-defiant-20111125-1ny7r.html
The percentage moves of the Dow and AUD are not exactly the same (but close). The last time the AUD was in the low 60's the DOW was about 8300. Here the AUD found support and the Dow continued down to 6700. My opinion is that at 60c the dollar is too good to resist, If the market recovers, overseas investors get a bonus, not only shares rise but also the AUD. Below is a chart as an example. The bars are the Dow and the Candles are the AUD
