Dollar surges, yields fall but gold hesitant
By Colin Twiggs
August 27th, 2014 3:00 a.m. EDT (5:00 p.m. AEST)
- Dollar surge continues
- Treasury yields weak retracement
- Gold uncertainty continues
Interest Rates and the Dollar
The Dollar Index continues its impressive advance. Expect resistance at the 2013 highs at 84.50. Reversal below 81.50 is most unlikely.
* Target calculation: 81.50 - ( 81.50 - 79.00 ) = 84.00
The yield on ten-year Treasury Notes is retracing to test its new resistance level at 2.40/2.50 percent. The primary trend is down, with 13-week Twiggs Momentum holding below zero. Respect of resistance is highly likely and would confirm a decline to 2.00 percent*.
* Target calculation: 2.50 - ( 3.00 - 2.50 ) = 2.00
Gold continues in a narrow range, between $1280 and $1320/ounce, in the apex of the triangle. Both this and oscillation of 13-week Twiggs Momentum close to zero signal uncertainty. Expect further consolidation between $1250 and $1350 in the medium-term. Breakout from that band is likely to indicate future direction. Falling crude prices and low inflation favor a down-trend.
* Target calculation: 1200 - ( 1400 - 1200 ) = 1000
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