Senior Trader Update 10th May 2017

Good morning everyone,
 
XAU/USD stuck to the recent script, holding doggedly to the (inverse) correlation between itself & USD/JPY (chart attached). Speculative rebalancing & technical selling resulting from US dollar and equities strength, as well as the near certainty of a June US Federal Reserve interest rate hike, all continued to weigh upon the complex. Also depressing metals values was broad-based bearishness across the entire commodities asset class ranging from iron ore to crude oil.
 
XAU/AUD swung freely within a wide range yesterday, trading from AUD 1660 at the open to just short of 1675, before giving up the ghost at the European open and retreating to 1655 where it steadied and bounced to close at 1665.
AUD 1666.00 proving something of a pivot over the course of the past week. The volatility was driven by fluctuations in the AUD/USD which weakened on the back of Retail Sales (March) data released during early Far Eastern trade before re-focusing on the Federal Budget statement in the evening which resulted in choppy, sideways trade between 0.7330 to 0.7360 through to the close.
 
Nothing further to add at present. Technically, XAU/AUD held and bounced off the 200 Day moving average at AUD 1652 and moved back above the 38.2% Fibonacci retracement of the AUD 1578 to 1712.75 move (respectively those are; AUD 1661.25 (38.2%), 1645.30 (50.0%) & 1629.40 (61.8%)) and a short-squeeze back into the AUD 1675 / 1685 zone would not surprise at all.
 
In XAU/USD the 100 Day moving average near USD 1222.00/oz finally gave way which now leaves the path open for a probe of the psychological ‘big figure” at USD 1200.00/oz and the March 10th low at USD 1195.00/oz.
 
The Gold/Silver ratio ‘hung’ tantalisingly close to the 76.00 level for the fifth successive day but was unable to muster the momentum for an advance.
 
Enjoy the proxy USD/JPY trade in XAU/USD for the time being.
 
Kind regards,
Andre