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Gold, Crude Test Support

By Colin Twiggs
August 5, 2008 3:30 a.m. ET (5:30 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 broke through medium-term support at $910 and is headed for a test of primary support at $850. Recovery above $910 is unlikely — and would warn of a bear trap.

Spot Gold daily chart

In the long term, gold remains in a strong primary up-trend. Failure of support at $850 is not expected — and would signal a primary down-trend.

Spot Gold monthly chart

Source: Netdania

Crude Oil

West Texas Intermediate Crude is testing medium-term support between $122 and $120/barrel. Recovery above the recent high of $128 would warn of another test of $150, while failure of support at $120 would offer a target of $100.

Crude oil

In the long term, penetration of the long-term trendline remains unlikely.

Crude oil monthly chart

Source: Netdania


Currencies

The euro broke through medium-term support at $1.56 and, similar to gold, is headed for a test of primary support at $1.53. Penetration of short-term support at $1.55 would add further confirmation.

Euro US dollar short-term

Source: Netdania

The dollar has started a bullish narrow consolidation below 108.50/109.00 against the yen. Upward breakout would signal a primary up-trend. Reversal below 107 is less likely — and warn of another test of 104.

US dollar Yen

Source: Netdania

The Australian stock market is falling, bond prices are rising, and the Australian dollar is weakening. The Aussie fell sharply to below $0.9300 against the greenback, signaling a primary trend change. Expect support at $0.9000. Recovery above $0.9300 in the next few days is unlikely — and would warn of a bear trap.

Australian dollar US dollar

Source: Netdania

The Aussie is also testing support at 100 against the yen. Failure would warn of a test of support at 96, while primary support remains a long way off at 88.

Australian dollar Yen

Source: Netdania



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