Gold Rises As Dollar Weakens
By Colin Twiggs
July 15, 2008 1:00 a.m. ET (3:00 p.m. AET)
Spot gold broke through resistance at $950, signaling a test of $1000. Expect a retracement to test the new support level. Reversal below $910 is unlikely — and would warn of a test of primary support at $850.
West Texas Intermediate Crude is consolidating below short-term resistance at $145/barrel. Narrow consolidation would be a bullish sign. Breakout would offer a target of $155 [135+(145-135)], but expect strong resistance at $150. Reversal below $135 is unlikely and would warn of a secondary correction. Primary support remains at $100/barrel.
The euro has made a narrow bullish consolidation after breaking through $1.5850. Expect strong resistance at $1.60 — as well as the possibility of ECB intervention if the euro threatens to rise above this level.
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The dollar threatens to fall below 105 yen, which would signal another test of 100 — and possibly primary support at 96. V-shaped bottoms are prone to failure and generally end up as double bottoms or even inverted head and shoulders patterns.
The Australian dollar broke through resistance at $0.9700, signaling a test of parity. Expect retracement to test the new support level in the short-term. Reversal below $0.95 is unlikely at present — and would warn of a test of primary support at $0.90. Breakout below the rising trendline would also warn of a primary trend change.
The Aussie is headed for a test of resistance at 104 yen. Breakout would signal an advance to 108. Reversal below 100 is unlikely — and would test primary support at 88.
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