By Colin Twiggs
June 24, 2008 5:00 a.m. ET (7:00 p.m. AET)
Spot gold broke above its bullish falling wedge pattern, signaling a test of resistance at $940/$950. The signal would be confirmed if price penetrates short-term resistance at $910, with the latest retracement respecting the upper border of the wedge pattern.
In the longer term, a rise above $940 would test $1000/$1030; while reversal below $850 would signal a primary down-trend.
West Texas Intermediate Crude is consolidating in a narrow band between $131 and $139, a continuation pattern. Upward breakout is more likely, and would offer a target of $135+(135-122)=$148, while reversal below $131 would test support at $122.
In the longer term, failure of support at $122 would test the long-term trendline — at the $100 level.
The euro is consolidating above short-term support at $1.5450; breakout above $1.5650 would test $1.5850, while failure of $1.5450 would re-visit primary support at $1.53.
In the longer term, failure of support at $1.53 would test the rising trendline at $1.43, while breakout above $1.60 would offer a target of $1.67.
The greenback is retracing after testing resistance at 109 yen. Respect of support at 106 or breakout above $109 would signal an up-trend, but we need to be cautious: V-shaped bottoms are prone to failure.
The Australian dollar respected support at $0.93 and the short-term consolidation at $0.95 is likely to resolve into a test of resistance at $0.9650. Reversal below $0.93 is not expected — and would test primary support at $0.88/$0.90.
The Aussie is edging up cautiously against the yen. Expect another retracement to test the new support level at 100. In the longer term, an advance to 108 is likely, while reversal below 100 is not expected — and would test long-term support at 88/90.
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Instead of being always right, financial markets are always wrong.
They have the ability, however, both to correct themselves and occasionally to make their mistakes come true.......
~ George Soros: The New Paradigm For Financial Markets
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