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Gold, Crude, Euro, Aussie Plummet

By Colin Twiggs
August 12, 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 broke through primary support at $850, signaling the start of a primary down-trend. The next level of support is $770.

Spot Gold daily chart

The target for the breakout is $700. That is $850 - ($1000 - $850).

Spot Gold monthly chart

Source: Netdania

Crude Oil

West Texas Intermediate Crude is also in a strong down-trend: headed for medium-term support at $110/barrel.

Crude oil

The longer term target is $100, calculated as $122 - ($145 - $122).

Crude oil monthly chart

Source: Netdania


Currencies

The euro has plunged since breaking primary support at $1.53, penetrating the next level of support at $1.50. And retracement to test the new resistance level was quickly overrun.

Euro US dollar short-term

The calculated target is $1.46, that is $1.53 - ($1.60 - $1.53), but $1.43 is a more likely support level.

Euro US dollar short-term

Source: Netdania

The dollar penetrated resistance at 108.50/109.00 against the yen, signaling the start of a primary up-trend. Expect a retracement to test the new support level.

US dollar Yen

The target is 120 yen — at the upper border of the long-term descending triangle.

US dollar Yen

Source: Netdania

Unwinding carry trades appear to have destabilized the Australian dollar which is weakening against both the yen and the greenback. Since breaking primary support at $0.93 the Aussie fell through the next level of support at $0.90 and has already reached the target of $0.88, calculated as $0.93 - ($0.98 - $0.93). Expect further support at $0.85. Failure would warn of a test of $0.77.

Australian dollar US dollar

Source: Netdania

The Aussie also broke support at 100 against the yen, signaling a test of support at 96. Failure would warn of a test of primary support at 88.

Australian dollar Yen

Source: Netdania



Sometimes the best trades are not the winning ones that put money in your pocket; sometimes they are the ones that get you out of the market at the right time.

~ Phil Flynn

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