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US Dollar Sets 2010 Low as Stocks Break Out, Gold Rally Accelerates
Written by article default Thursday, 14 October 2010 03:55
MSCI WORLD STOCK INDEXPrices have broken through the top of a rising channel that had guided the advance since May, opening the door for a test of April’s swing high at 318.63. Deeply overbought relative strength studies hint at the possibilities of a double top at this juncture, but confirmation is required before anything of the sort can be said with conviction. Initial support stands at 314.43, the broken channel top.
US DOLLAR INDEX
Prices are probing below support at 76.60, the 2010 year-to-date low. From here, we note a developing falling channel established from the swing top in June, with the bottom forming support at 76.16. Below that, the bottom of a the shorter-term (but better defined) channel in place since September is found at 75.18.
CRUDE OIL
Positioning has been effectively unchanged since prices put in a Bearish Engulfing candlestick pattern following a test of resistance at Augusts’ swing high ($82.97) last week, hinting that a move lower is ahead. A break below initial support at $81.20 – the 23.6% Fibonacci retracement of the latest upswing – exposes the 38.2% and 50% levels at $79.21 and $77.60, respectively.
GOLD
Prices have jumped to a new record high to meet resistance at the top of a rising channel in place since mid-September (now at $1377.87). A push above this barrier exposes the $1400 figure as well as the top of a larger rising channel established from the cyclical low in October 2008, now at $1457.78. Near-term support lines up at $1345.30, the shorter-term channel bottom.
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