Gold and the dollar

By Colin Twiggs
January 17th, 2013 2:00 a.m. ET (6:00 p:m AET)

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Gold is undergoing a correction on the weekly chart. Declining momentum and breach of the long-term rising trendline suggest that the 5-year bull-trend is ending, but recovery above $1700 per ounce would indicate one more attempt at $1800 resistance. Respect of $1700, however, would indicate a test of primary support at the May 2012 low at $1525.

The Dollar Index respected resistance at 81 and is likely to re-test primary support at 78.50. Twiggs Momentum oscillating below zero already indicates a primary down-trend — confirmed if primary support is broken. Recovery above 81.50 remains unlikely, but would indicate an advance to 84.

* Target calculation: 78.5 - ( 81.5 - 78.5 ) = 75.5

He who knows when he can fight and when he cannot, will be victorious.

~ Sun Tzu: The Art of War