The correlation between the main commodity price index and the AUD/USD has been quite remarkable over the years. As can be seen on the attached weekly chart, the CRB (the black bars) has formed a really impressive inverted H&S formation with a neckline close to the market at 253. This chart should head significantly higher. Remember that a year ago the index was at nearly 500.
Now look at the AUD/USD (the orange bars). If the traditional correlation were still to hold true, then the AUD/USD should be trading around .68 whilst undoubtedly heading higher.
There is little doubt in my mind that the AUD/USD is trading ahead of itself and is in other words overvalued in the short term at least. Even if the CRB makes a strong recovery back towards its 100 and 200-week moving averages around 320, the AUD/USD at current levels would still be historically overvalued against the index.
Remember that price is extremely important when trading FX and it is not all ‘trend’. Buy dips in the AUD/USD certainly but sell rallies as well at these overvalued prices.