In a remarkable turn of events, Australia took the lead yesterday becoming the first major economy to raise interest rates since the beginning of the financial crisis. World markets are really taking Australia's rate hike as a signal the world economic recovery is gathering pace.  This is a prime opportunity for Aussie Dollar strength, as world economies show signs of improvement but are not necessarily ready to pull the trigger on interest rates.

Global investors took heed of Australia's interest rate hike, pushing commodity markets up at the expense of the greenback. The US currency continued to decline against its major counterparts and Gold hit the sky as a result. Overnight Gold hit all time highs of US$1045 an ounce as the US Dollar continued to be talked down, this time in the form of a newspaper report out of the UK suggesting major exporters and consumers of Crude Oil were working on a plan to change the underlying currency in which oil trading is denominated.

With the interest rate hype well and truly factored into the Aussie Dollar, near term upward movements will be highly dependent on continued US Dollar weakness, until then the Aussie is resting a fraction above US$.8900.

From a technical perspective short term outlook shows the Aussie dollar is poised for a reversal with the RSI (Relative Strength Index) showing overbought signals as the price action crossed through the '70' mark, brought on by the burst of energy from the events of yesterday. Technical analysts believe an RSI reading of '70' or greater suggests a reversal of price action is imminent. The Aussie Dollar may technically be poised for a reversal, however important considerations need to be made to ongoing pressure the US dollar is facing, as the world economy strengthens. The train is moving fast and no one wants to jump off.