Aussie weakness May 2010

The Aussie Dollar (AUD) took a nose dive in the forex markets this week which would indicate a flaw in the reasoning of this blog called PARITY MONEY and Gold.




Click on Chart to Enlarge

Here's a chart that shows the Aussie Knife to 80 in the month of May 2010.

For months prior to this move the Australian Dollar had been trading against the US dollar in a range between a high of nearly 94 and a low of 85 and looking ready to move towards 99 to test a high set back in 2008.

The price of Gold hit new highs last week and there was news that the big money players might set up a rally to move gold to a lesser value in order to catch some of the overleveraged long gold buyers. By the end of the week gold had lost several percent and the AUDUSD and many other Australian dollar pairs had tumbled with the lower interest in gold.

But that isn't the full extent of what is playing against the value of the Australian dollar as this article written in 2009 claims.

The article is called "Parity Beckons for Aussies Dollar".

At the time it looked certain that the Australian Dollar would make par with the US dollar. There had been a rally from a low of 60 after the 2008 market crash to 83.

The Australian Banks had raised interest rates. The Chinese looked as though they would lead the way for the post 2008 collapse. Gold was on the rise.

The Australian rally did move but the momentum was only good enough to carry the AUDUSD quote to 94. And suddenly there were rumours that the Chinese would not be able to continue their phenomenal growth potential.

The Australian dollar is somehow connected to the Chinese economy states the article.

So what is forcing the price of the Aussie ?

Is it a technical move by gold manipulators ?

Meanwhile the Euro is under pressure and there was a rally towards Australian dollars which was ruthless and lasted months where a 2.11 quote ended being devalued to 1.38. This was amazing. There was hardly an opportunity to go long all that time yet in this last week the Aussie traders gave back 15 points on a spike. And the game of trading the EURAUD continues next week with a fresh opening quote at 151 with a high of 154.5 and a low of 1.39.

This idea of trading forex is not for the light hearted.

Is the AUDUSD going to par?
Is the EURAUD going to par?

This week saw resistance against both questions ?