sitesearch
 

counter

Euro Breakout

By Colin Twiggs
April 22, 2008 10:30 p.m. ET (12:30 p.m. AET)

These extracts from my trading diary are for educational purposes and should not be interpreted as investment or trading advice. Full terms and conditions can be found at Terms of Use.

Gold

Spot gold twice respected support at $900. Recovery above recent highs at $950 would complete an inverted head and shoulders pattern with a target of $1000. Reversal below $870 is less likely — and would signal a test of primary support at $800/$775.

spot gold hourly chart

Source: Netdania

Gold and the euro have moved in sync since 2006. Further weakness in the dollar would ensure that gold resumes its upward path — in line with the euro.

Crude Oil

May 2008 Light Crude is testing resistance at its target of $120 per barrel. Expect a retracement to test the new support level at $110.

crude oil

Currencies

The euro broke out of its bullish ascending triangle, offering a medium-term target of 1.59+(1.59-1.53)=$1.65. Expect short-term retracement to test the new support level at $1.59.

euro us dollar short-term

Source: Netdania

The greenback respected support at 100 yen and rallied to the first line of resistance at 105. Breakout would indicate a test of the upper trend channel, while reversal would find support at 96. In the longer term, a break below 96 would offer a target of 90.

us dollar yen

Source: Netdania

The Australian dollar is testing resistance at $0.95. Breakout would offer a target of 0.95+(0.95-0.90)=1.00 (parity). Penetration of the short-term rising trendline is not expected and would warn of another test of support at $0.90.

australian dollar compared to us dollar

Source: Netdania

The Aussie continues in a descending right-angled broadening pattern against the yen, headed for a test of resistance at 100. Watch for a failed swing (that does not reach the opposite border) which would signal future breakout direction.

australian dollar compared to yen

Source: Netdania



It is often easier to not do something dumb
than it is to do something smart.

~ Marcus J Ranum

How Good Is Your Market Analysis?
Compare our market views.





The weekly Trading Diary offers fundamental analysis of the
economy and technical analysis of major market indices,
gold, crude oil and forex.
The monthly What's New newsletter covers new articles
on Trading and the Economy, as well as new software updates.

To understand my approach, please read Technical Analysis & Predictions in About The Trading Diary.



 
Top of Page