Never bought into this Yuan back oil trading model.
$1322 was the level I was observing as a technical level that if it held could form a higher low. It was derived off the 9 Feb high on my NY close chart but it was a very "strong" level of potential support as I had feared the probing of the conspicuous 8 Feb low! My basic definition of a swing low is the typical 3 bar fractal with either daily low higher than the middle daily low print. Confirmed on the close of Friday's price action.
It is now rather obvious that the bond market is telling us the US IR are going up. In addition the spread between Oz 10yr and US 10yr is now negative so I am expecting AUDUSD to keep falling over time. This will be the cushioning effect on the gold price for those exposed to local ccy revenues.
The surprising thing is the ASZ200 after that aggressive sell off. I was expecting a retrace back down to form a double bottom or higher bottom before the slow recovery but it just had a quick V shape recovery. Obviously the past 2 weeks threw up a lot of dip buying which I decided to sideline not expecting a V shape recovery. That's the market that always disappoint predictors
The question going forward is whether gold will follow the strong economic recovery using a blunt IR to control over heating AND will the rate rise be sufficient to maintain a status quo of maintaining that economic recovery going forward. So far the Feds has a better handle on the timing of their monetary policy so far against a sea of negative criticism right through the decade old QE to taper and IR rise!
