Gold Testing Support At $900

By Colin Twiggs
February 19, 2008 3:00 a.m. ET (7:00 p.m. AET)

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The rising wedge pattern (identified last week) failed to make five clear points of contact with the converging borders prior to the breakout — and is therefore unreliable according to Bulkowski. Spot gold is testing short-term support at $900 and failure would warn of a test of primary support at $850. Alternatively, breakout above $930 would signal a further primary advance.

spot gold

Source: Netdania

Crude Oil

March 2008 Light Crude respected primary support and is headed for another test of $100/ barrel, after completing a double bottom with a breakout above $92.50. Failure of support at $86 is unlikely — and would warn that crude has started a primary down-trend.

crude oil

The weekly chart shows a strong primary up-trend with broad consolidation below strong resistance at $100. A failed (or partial) swing would warn of a breakout.

crude oil weekly


The euro broke short-term resistance at $1.4600 and is now retracing to test the new (short-term) support level. Respect would confirm another test of $1.49, while downward breakout would test the lower border of the broad ascending triangle formed over the past few months.

In the long term, breakout above the key psychogical level of $1.50 would offer a target of 1.50+(1.50-1.43)=$1.57; while reversal below $1.43, though unlikely in the present circumstances, would reverse the primary up-trend.

euro us dollar short-term

Source: Netdania

The dollar continues in a long-term down-trend against the yen, with a target of 100. In the short-term, having reversed above 108, followed by a short retracement that respected the breakout level, expect the greenback to test the upper border of the trend channel.

us dollar yen

Source: Netdania

The Australian dollar broke above $0.91 after twice respecting support at $0.89 against the greenback. Expect a test of $0.94. Reversal below $0.89 is most unlikely — and would indicate a test of $0.85.

australian dollar compared to us dollar

Source: Netdania

The Aussie is testing the upper border of a broadening descending formation against the yen and breakout above 100 would signal a test of 108. In the short-term, narrow consolidation below $100 would be a bullish sign.

australian dollar compared to yen

Source: Netdania

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