Dollar Weak, Gold Strong
By Colin Twiggs
January 15, 2008 4:00 a.m. ET (8:00 p.m. AET)
Gold and the euro continue to strengthen against the greenback as the Fed contemplates further rate cuts.
Spot gold reached its medium-term target of $900, but the rally shows no signs of slowing. Primary support at $775 is unlikely to be tested.
Crude is likely to lag gold and the euro as it is more susceptible to falling demand from a slowing US economy.
June 2008 Light Crude has been testing resistance at the key psychological level of $100/barrel. Reversal below $90 would signal weakness, while a fall below $86 would warn that the primary trend has reversed.
The euro is headed for another attempt at $1.50. Expect major resistance, while narrow consolidation below this level would be a strong bull signal. Primary support remains at $1.43.
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The (dollar) down-trend against the yen continues. Breakout below suport at 107 would signal a test of key long-term support at 100. The target is calculated as: 107 - (114 - 107) = 100.
The Australian dollar broke through resistance at $0.8900, signaling a test of the previous high of $0.9400. Consolidation above the new support level (0.8900) is a bullish sign; reversal below $0.8900 is not expected and would indicate weakness.
The more hawkish stance of the RBA should see the Aussie continue to strengthen against the greenback.
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average. Even being right three or four times out of ten should
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