Gold & Euro Strengthen While Crude Falls
By Colin Twiggs
July 22, 2008 4:00 a.m. ET (6:00 p.m. AET)
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.
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.
Expect support at $120 and $110, if required. Primary support remains at $100/barrel.
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.
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.
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.
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.
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