Saturday, April 24, 2010

Commodities View

US Dollar Index
The US Dollar Index found support at 80 and is headed for another test of resistance at 82. Bearish divergence on Twiggs Momentum (21-day) continues to warn that the up-trend is losing impetus. Failure of primary support at 79.5 would offer an initial target of the January low at 76.5*. Breakout above 82.2 is unlikely, but would test 84*.

Gold
The weakening dollar suggests stronger gold prices. The precious metal found support at $1120 and is rallying for another test of resistance at $1160. Breakout would signal an advance to $1220*. Rising Momentum (21-day) indicates the start of an up-trend. Reversal below $1120 is unlikely, but would test support at $1080.

Crude Oil
Crude is consolidating in a narrow range between $84 and $87/barrel — a continuation pattern. Upward breakout would offer a long-term target of $96/barrel*. Reversal below the rising trendline is unlikely, but would warn of another test of primary support at $70. Momentum breakout below the rising trendline would be bearish in the short-term, but a subsequent large trough that respects the zero line would signal a primary advance.

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