Dollar surge continues
By Colin Twiggs
November 17th, 2011 4:00 a.m. ET (8:00 p:m AET)
The Dollar Index is headed for a test of resistance at 80* after respecting support at 76.50. The brief dip of 63-day Twiggs Momentum below zero also suggests a primary up-trend. In the long term, breakout above 80 would signal an advance to 85*.
* Target calculations: 77.5 + ( 77.5 - 75.0 ) = 80.0 and 80 + ( 80 - 75 ) = 85
Spot Gold is consolidating between $1740 and $1800, with the rising dollar halting its advance. Penetration of the rising trendline warns that momentum is slowing and breach of support at $1740 would signal another test of $1700.
* Target calculation: 1900 + ( 1900 - 1600 ) = 2200
The weekly chart shows gold continuing its long-term ascent in a narrow trend channel. Breakout below $1600 would warn of a reversal.
The gold-oil ratio has fluctuated in a far narrower range since mid-2009 and it may take some years before we see another overbought/oversold signal.
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