"The window in the diminished correlation extreme between the Australian dollar and gold appears to be resolving. We maintain the bearish expectations of long-term breakdowns in both the Aussie as well as gold - as the respective pivots in this long-term relationship once again tighten." On-Script February 14, 2013
Fast forward to today, and both gold and the Aussie have retraced the entire moves that began with the push for QE2 by Bernanke in the summer of 2010. Despite having these cyclical windows where the correlation trends have been offset (most recently Q3 2013) from each other, we believe the next correlated pivot will be higher for both assets as the Aussie finds support at these levels.
* The comparative series for the Australian dollar was normalized based on the momentum lows as determined by the respective oscillators for each cycle.