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Gold & Euro Strengthen While Crude Falls

By Colin Twiggs
July 22, 2008 4:00 a.m. ET (6:00 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 successfully tested the new support level at $950 and is headed for $1000. Expect further profit-taking at this significant psychological barrier. Reversal below $950 is unlikely — and would warn of a test of primary support at $850.

Spot Gold daily chart

Source: Netdania

Crude Oil

West Texas Intermediate Crude broke through short-term support at $135/barrel, as well as the (long-term) rising trendline, warning of a secondary correction. Expect a retracement to test the new resistance level ($135). A break of short-term support at $128, however, would signal another decline.

Crude oil

Expect support at $120 and $110, if required. Primary support remains at $100/barrel.

Crude oil weekly chart

Source: Netdania


Currencies

The euro respected support at $1.58 and is headed for another attempt at $1.60. Consolidation between $1.58 and $1.60 would be a bullish sign, but expect strong resistance at $1.60 — as well as the possibility of ECB intervention.

Euro US dollar short-term

Source: Netdania

The dollar is edging lower against the yen, rather than a sharp fall — a bullish sign. Respect of support at 103 would indicate another test of resistance at 109, while failure would warn of a test of primary support at 96.

US dollar Yen

Source: Netdania

The Australian dollar formed a small pennant above $0.9700, signaling continuation of the advance. Expect a test of parity. Reversal below $0.95 (and the rising trendline) is unlikely at present — and would warn of a primary trend change.

Australian dollar US dollar

Source: Netdania

The Aussie broke through resistance at its June high and is now consolidating above this level, signaling continuation of the up-trend. The target for the advance is 108. Reversal below 100 is unlikely — and would test primary support at 88.

Australian dollar Yen

Source: Netdania



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~ P. J. O'Rourke

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