AUD/USD and Gold

The poor quarterly of AngloGold (http://www.bloomberg.com/news/2013-...and-suspends-dividend-as-bullion-tumbles.html) tells us something very important. Below the level of 900 the company will be forced to suspend the extraction of gold: is it going to be the support key for XAU?

 

It’s pretty obvious that we should have seen a primary bottom for Aud. The excessively negative sentiment causes strong rebounds like the one of today, due to the first positive news for Aud (see China export).

 

of course hindsight is obvious

 

excessive sentiment causes reversals??

 

Correct. The situation of the Aussie was perfect according to the contrarian to enter long. The graph shows what happens when the short Aud of the hedge fund is too high ..

 

I would say positioning is not sentiment though somewhat correlated. Still don't think that is what caused it. All hindsight indeed.

I did not need to see that graph to go long A$

 

I think that the behavioral analysis is as valid as the technical one, and knowing that all speculators are on the same side is worth more than any other oversold oscillator.

 

why not going step further and say technical indicators try to detect positioning at the time, same as behaviorial analysis.

whoever has better information who and what ==>> WINS.

 

Trading is exclusively a game of probabilities. We must commit ourselves to seek the right information, but we are still talking of probabilities...

 

And let's not forget that August is one of the worst months of the year for the Aussie, so I would take advantage of this rebound to lighten up and then back long in September.