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Gold Strengthens

By Colin Twiggs
January 17, 2009 1:00 a.m. ET (5:00 p.m. AET)

These extracts from my trading diary are for educational purposes and should not be interpreted as investment or trading advice. Full terms and conditions can be found at Terms of Use.

Gold

Spot gold respected short-term support at $800 and is headed for resistance at $900. Clear breakout above $900 would signal the start of a new (primary) up-trend. A secondary retracement is most likely, but would be a positive sign if it fails to test primary support at $700.

Crude Oil

Brent Crude is likely to respect resistance at $50/barrel, signaling another test of support at $40. Failure of support would offer a target of the 2003 low of $20/$25.

Currencies

Euro

The euro is retracing for another test of support at $1.25. Reversal above this level would be a positive sign, but Twiggs Money Flow warns of weakness. Failure of support would offer a target of $1.05/$1.00, calculated as 1.25 - ( 1.45 - 1.25 ). Expect further support around the 2005 low of $1.16.

Japanese Yen

The yen continues in a primary up-trend against the dollar despite Twiggs Money Flow signaling weakness.

Australian Dollar

The Australian dollar retreated below $0.70 against the greenback, after breaking out from a broad consolidation between $0.60 and $0.70. Twiggs Money Flow warns of weakness. Failure of support at $0.60 would offer a target of $0.50, while reversal above $0.60 would be a bullish sign.

Remember that there is nothing stable in human affairs; therefore avoid undue elation in prosperity, or undue depression in adversity.

~ Socrates