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Dollar for dollar, Australia’s better

The dollar is falling and commodities prices are soaring. Two major events are making headlines, making this a big day for currency traders.
By Andrew Snyder,Baltimore – (TFN): It is a huge day for the world’s currency traders. Not only did Australia surprise the markets with a sudden interest rate hike, but word is quickly spreading of a “secret” meeting by the world’s oil states working to rid their dependence on the American dollar and the growing level of risk that comes with it.
By far, the move with the most weight was made by Australia. By raising its key interest rate to 3.25%, the Reserve Bank of Australia signals its economy is one of the strongest on the planet – all thanks to a conservative financial approach and a wealth of high-demand commodities.
The unexpected news (most thought the hike would come later in the year) sent ripples throughout the markets. Here in the States, the dollar is down, commodities are soaring and the equities market is surging ahead.
Combine the news from Down Under with the secretive action from the world’s oil producers and you have a recipe for major currency disruptions.
Here comes trouble
While the report is being denied by Arab States, there is word of recent meetings between Gulf Arabs, Russia, China, Japan and even, dare I say, France where the topic of dumping the ever-risky American dollar has been a dominant theme.
This is big news, folks. It should be taken very seriously.
The countries want to rid their dependence on a weakening greenback and substitute the dollar’s dominance with a basket of currencies and hard assets, like gold.
While the action is “unofficial,” it is obvious the markets are paying attention.
Gold soared on the news, striking a new high over $1,040 per ounce. Oil surged back over $71 per barrel. And the dollar weakened even further, threatening to punch through the $1.48 level versus the euro.
What does it all mean for investors? To be certain, a weak dollar is good for the equities markets, especially as risk-averse investors flee the overweighted Treasury market.
But the news is even better for commodities traders. The weaker the dollar gets, the higher the value of dollar-denominated commodities must rise to make up for the difference.

Better than gold?
If you have been following my recent work, you know I am particularly bullish on platinum-group metals.
Platinum is not just a commodity with intrinsic value as a rare metal; it also has incredible growth potential as an industrial staple. As the world’s economy gains momentum, platinum will surge in value.
It is already happening. Hot Stock Confidential and TFN Strategic Traders know it.
I recommended platinum-based plays for both services.
For the equity traders at Hot Stock Confidential, last week’s recommendation is already worth double-digit gains. And for the options traders at TFN Strategic Trader, platinum’s intraday rally caused their recommended play to more than double in value during the session.
Now that Australia has broken the interest rate barrier by suddenly hiking its central rate, more countries are likely to follow. Most experts expect South Korea to follow next, with its Asian counterparts not more than a few months behind.
Combined with the growing cries for ridding the world of dollar denomination, the news is not good for the greenback.
But the situation is ripe for commodity bulls.

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Euro / Dollar Technical Forex Analysis for Forex Traders

The Euro accurately reached the retest level that we specified as 1.4588 (yesterday's low 1.4592), and retested the broken channel successfully. Then it started rising and reached the important Resistance 1.4720 this morning, which was specified as the most important target in yesterday's report (the high until the moment of preparing this report is 1.4716). The Euro could keep these benefits, and advance even more if price stays above the short-term support 1.4668, which is the rising trendline from Friday's high, on the intraday charts. If we stay Friday's high, on the intraday charts. If we stay above it, there will be another attempt to break 1.4720 and head higher. And although we notice a resistance at 1.4776, we believe that if the Euro breaks 1.4720, then it will be able to reach areas above 1.48 within 24 hours after the break, first of which is 1.4824, then new highs above the tops of September 22nd & 23rd.
Support:
• 1.4668: the rising trendline from Friday's low.
• 1.4592: yesterday's low.
• 1.4509: Fibonacci 50% for the rise from 1.4176 to last week's top 1.4842.
Resistance:
• 1.4720: the resistance area that stopped the Euro from rising 3 times lately.
• 1.4776: previous well known resistance.
• 1.4824: previous daily high.
Forex trading analysis by forexpros. com - Written by Munther T. Marji

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