Gold Bounces Back
By Colin Twiggs
October 1, 2009 4:00 a.m. ET (6:00 p:m AET)
The US Dollar Index found short-term support at 76 before rallying to test resistance at 77.50. Breakout above resistance (and the declining trendline) is unlikely, but would indicate that the primary down-trend is weakening. Recovery above the August high of 79.50 would warn that the primary down-trend is reversing. The medium-term target, however, remains at 74*.
* Target calculation: 78.50 - ( 83 - 78.50) = 74
Spot gold retreated below the key $1000 level, but a strong blue candle to $1010 indicates solid buying support. Breakout above $1020 would signal a primary advance to $1100*. Failure of support at $985 is unlikely, but would warn of a potential bull trap. The long-term target for the breakout is $1300*.
* Target calculations: 1000 + ( 1000 - 900 ) = 1100 and 1000 + ( 1000 - 700 ) = 1300
The euro is retracing from resistance at $1.48 to test support at $1.44. Recovery above $1.48, however, would signal an advance to $1.50*. Reversal below $1.44 is unlikely, but would warn of a weakening up-trend — as would penetration of the rising trendline. In the long term, breakout above $1.50 would signal an advance to the 2008 high of $1.60.
* Target calculation: 1.44 + ( 1.44 - 1.38 ) = 1.50
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The dollar continues its primary down-trend against the yen, testing the lower border of its trend channel. Breakout above the declining trendline would warn of a rally to test the upper channel border — and resistance at ¥94. Failure of support at ¥90 would test the 2008 low of ¥87.
The Aussie dollar continues to edge upwards against the greenback — recovering commodity prices increasing momentum. Breakout above short-term resistance at $0.88 indicates a test of the upper channel border; while reversal below $0.86, though unlikely, would warn that the trend is weakening. In the long term, breakout above $0.90 would offer a target of parity*.
* Target calculation: 0.90 + ( 0.90 - 0.80 ) = 1.00
If you observe a really happy man you will find him building a boat, writing a symphony,
educating his child, growing double dahlias in his garden,
or looking for dinosaur eggs in the Gobi desert.
He will not be searching for happiness as if it were
a collar button that has rolled under the radiator.
He will not be striving for it as a goal in itself.
He will have become aware that he is happy in the course of
living life twenty-four crowded hours of the day.
~ W. Beran Wolfe