Gold & Dollar Tentative

By Colin Twiggs
March 10, 2010 10:00 p.m. ET (2:00 p:m AET)

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The US Dollar Index is consolidating above 80 while Twiggs Momentum (21-day) declines. Reversal below 80 and the rising trendline on the price chart would confirm that the primary up-trend is weakening. Breakout above 81.4, however, would signal another primary advance.

Gold

Gold retreated below $1125 while Twiggs Momentum (21-day) declined; respect of the zero line would be a positive sign. Reversal below $1100 would test primary support at $1060. Recovery above $1160, however, would indicate a primary advance to 1380*.

* Target calculation: 1220 + ( 1220 - 1060 ) = 1380

Crude Oil

Crude is headed for a test of the upper border of the large broadening wedge consolidation. Breakout or a failed swing would indicate future direction. On the Momentum chart, a large trough that respects the zero line would signal a primary advance. Reversal below $70 is unlikely, but would indicate a primary down-trend.

Euro

The euro is consolidating below 41.37 as Momentum rises. Breakout above the declining trendline would warn that the primary down-trend is slowing — as would a higher (large) trough on Twiggs Momentum (21-day). Reversal below short-term support at $1.345, however, would signal a primary decline to $1.28*.

* Target calculation: 1.35 - ( 1.42 - 1.35 ) = 1.28

Japanese Yen

The greenback's marginal break below support at ¥ 89 indicates buying pressure. Breakout above the declining trendline would warn that the down-trend is weakening — and signal an advance to ¥97* if there is a breakout above ¥ 92. Reversal below ¥ 89, however, would signal a test of ¥ 85.

* Target calculation: 93 + ( 93 - 89 ) = 97

Australian Dollar

The Aussie dollar is headed for a test of $0.93, despite signs that the housing market may be cooling. Reversal below $0.90 is unlikely, but would warn that the up-trend is slowing. Rising Twiggs Momentum Oscillator (21-day) is a bullish sign and a large trough above zero would signal a primary advance.

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