Today we're going to look a currency pair. We're going to look at AUD versus the USD. Now the AUD for a long time has been one of those currencies very heavily dependent on commodities and all the talk very recently has been about are we now starting to see the topping out of commodities and then the follow on from that of course, the topping out of equity markets.

Now the AUD is very heavily dominated by what happens on the commodity markets. Now, very recently we've seen of course some real strength in the USD. We've seen a much more hawkish Federal Reserve. We've seen talks of discount rate being raised by the Fed. Talks of higher rates into the actual Fed funds rate as well.

So all of this hawkish talk from the Federal Reserve has left the USD going higher and has led many to believe of course that the natural way the markets will react after that would be to see commodities start to top out and equity markets start to top out.

Now there had been a lot of signs of that. We have seen these levels at the top here really start to support and cap any sort of rally to the upside. We weren't just seeing this here on the AUD. We were seeing this on the likes of the Reuters CRB Commodity Index. That was seeing a real turnaround and even if you went further into commodities, looking at a few individual stocks, even the UK mining sector was having this same topping out which is of course building this anticipation that we were going to see a turnaround in the market.

There has been a lot of talk very recently about death crosses and golden crosses in terms of moving averages. Now when you look for these crosses - the death cross and golden cross, so when the 55-day average, or the 50-day average crosses over the 100 day average.

Now in the past we've seen this on the AUD and it has worked very reliably. We've seen the markets cross and the subsequent move being pretty aggressive.

Now of course when we see that 55 drop below the 100, that's a real bearish signal on this market and that would be showing a real turnaround in commodity markets and, of course, if we saw it on the AUD it would give us that overall feeling that with this being paired against the USD that that USD is very strong and that the very heavy commodity laden AUD was about to go lower.

We have seen that cross. We saw that cross here, but it shows you how undecided these markets have been of late. We had all this talk that we were going to see commodities go lower and equities go lower, but we haven't really seen that move at all. All we've seen is the fact that markets and traders have been thinking that any good news, which is pushing the USD higher, but any good news about the economy is just being seen as overall bullish sentiment and leading commodities, equities and the USD all to the upside. Not the way we would expect this market to react.

Now, we've seen that. We've seen this cross of what you would call a death cross here with the 55 day dropping below the 100 day after a strong up move and at the bottom of this up move was the subsequent move the other way, the 100 day going through the 55 day - the golden cross. That told us that we got this real bullish move. We saw that cross there and we would be expecting a very much different story and the markets to really drop down. And we did see it and everyone was talking about this downside in commodities here. We've seen the cross, we've seen some real downside, but we've been supported down here. The market has been stopped and we've rallied higher and what we've actually seen very recently is the cross the other way.

So these two crosses in close proximity are showing us that really the market is so undecided. We know which way the market should be performing, but it's just not going that way and that's leading this market to be very undecided about where commodities and equities are going.

And while we've got that indecision, it's just a case of riding them higher. We've seen this cross the other way. We've also seen it coincide with another break of this upside level.

Now we have started to turn round. We are seeing a move to the downside. But the next few days are going to be pivotal in terms of this one to see exactly where we go, what sort of movements we get out of it and how the markets are going to react in terms of this commodity and equity story.

At the moment, as we say, it seems that the market should be reacting one way but they're currently not. So while we're not seeing that movement, it's a case of if you can't beat them join them. If equities and commodities are going higher but they shouldn't be, the only thing we can do is follow that higher as well.

So we have seen that turnaround. It is starting to get a little bit more negative, but the key thing is that these two moves, this cross here and this cross here, are giving two different opinions.

The last time we saw a cross like this it pushed us higher. The last time we saw this more negative cross it really took us to the downside. It shows how undecided this market is about commodities and equity markets where they're going to go.

We know that USD is strong, but the natural reaction is for commodities and equities to come lower and at the moment we're just not seeing that.

Thanks for listening today. Tomorrow we're going to be looking at a few other things. Mainly we're going to be looking into commodities and looking into the gold price. But thanks for listening. My name is James Hughes from CMC Markets.