Dollar Strengthens, Gold Hesitates
By Colin Twiggs
February 24, 2010 10:00 p.m. ET (2:00 p:m AET)
The US Dollar Index is in a primary up-trend, testing resistance at 81. Slowing Momentum, however, warns of a retracement to test support at the rising trendline; confirmed if support at 80 is broken.
Gold is testing resistance at $1125. Breakout would indicate the end of the correction, while failure of short-term support at $1100 would test primary support — and reversal below $1060 would confirm a primary down-trend. Twiggs Momentum (21-day) recovery above 2% would suggest another primary advance, while below -2% would warn of a down-trend.
Crude is headed for a test of resistance at $82; marginal breakout would form a large broadening wedge. Momentum recovered above the falling trendline; a large trough that respects zero would suggest a new primary advance. Reversal below $70 is unlikely, but would signal a primary down-trend.
The euro is consolidating below the new resistance level at $1.36. Failure of short-term support at $1.345 would signal a new primary decline, while recovery above $1.37 would warn of a reaction to $1.425 — only likely if the Greek debt crisis is resolved.
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The greenback found short-term support at ¥ 90. Recovery above ¥ 92 would signal a primary advance; confirmed if resistance at ¥ 93.50 is broken. Reversal below ¥ 89, however, would warn of a strong correction.
* Target calculation: 93 + ( 93 - 89 ) = 97
The Aussie dollar is consolidating in a narrow range below resistance at $0.90, indicating a test of $0.93. Reversal below $0.89 is unlikely, but would test primary support — and a fall below $0.86 would signal a primary down-trend. Twiggs Momentum Oscillator (21-day) recovery above the declining trendline would be a bullish sign, while a large trough above zero would signal a primary advance.
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