Gold Testing $1000
By Colin Twiggs
March 4, 2008 3:00 a.m. ET (7:00 p.m. AET)
Spot gold is headed for a test of resistance at the key psychological level of $1000/ounce. Narrow consolidation below the resistance level would be a strong bull signal. Retracement below the rising green trendline is unlikely — and would warn that the up-trend is weakening.
April 2008 Light Crude broke through resistance at $100/ barrel — after a narrow consolidation. The tall shadow on the latest candle warns of a retracement to test support at $100 (resistance when broken becomes support).
The euro broke through resistance at $1.4950/$1.5000
and, after a strong rally, is consolidating above $1.5150.
There is even chance of a consolidation at this level, followed
by an upward breakout, or a retracement to test the new support
level at $1.4950/$1.5000 — affording traders an excellent
Retracements and advances tend to be symmetrical, with advances after a breakout roughly equal to the previous retracement. The medium-term target for the upward breakout is therefore calculated as 1.50+(1.50-1.43)=$1.57.
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The dollar broke downwards from the flag formation against the yen and is headed for a test of the lower channel border. Long-term and short-term targets now coincide at 100.
The significance of support at 100 is clearly shown on the monthly chart.
The Australian dollar is retracing after a failed breakout above $0.94. Today's 0.25% rate rise by the RBA should strengthen support and, provided price holds above $0.91, the outlook remains bullish. In the long-term, recovery above $0.94 would offer a target of parity; while reversal below $0.91 would test primary support at $0.85.
The Aussie made a similar failed break above 100 against the yen, followed by a sharp retracement. Expect support at 93; while a fall below 90 would signal continuation of the down-trend — with a target of 90-(100-90)=80.
The delight of the people at the success of their new
wealth-creating machinery was about this time abruptly chilled.
From some unknown cause the mystic wand of the magician was
losing its power. At the very moment when all apprehension had
passed away the spectre of depreciation appeared.
~ from an article on the Continental Currency in The New York Herald, January 1863.
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