-A trend reversal for the greenback
-Gold hits first key retracement
-Oil gets an oversold bounce
-Bonds plunge to key support zone
- Intermarket chart page updated
-Further commentary after the jump
-Gold hits first key retracement
-Oil gets an oversold bounce
-Bonds plunge to key support zone
- Intermarket chart page updated
-Further commentary after the jump
With its biggest eight-day surge since March, the US Dollar Index ($USD) broke resistance at 76 and RSI broke momentum resistance at 55. The 50-55 zone marked RSI resistance from June to November. These two breakouts suggest the start of a new uptrend for the greenback. Broken support at 77.5 turns into resistance that marks the first upside target on the daily chart. You can view the weekly charts on the intermarket chart page.
The surge in the Dollar weighed on gold over the last two weeks. However, Gold-Continuous Futures ($GOLD) is nearing the 38% retracement and becoming oversold after a $100 decline in eight days. We do not need a momentum oscillator to determine that gold is oversold at this stage. The 38% retracement mark is the first place to look for a bounce. Should the Dollar continue to its next resistance around 77.5, gold may correct further towards 1075, which is the 50% retracement.
Oil broke below support last week and plunged to 70 before getting an oversold bounce. I view the support break as bearish overall, but we could see a rebound back to broken support in the 75-76 area.
Even though the wedge breakout failed to hold, I remain bullish on bonds because support is at hand. The 30-year Treasury Bond ($USB) hit resistance around 123 and plunged over the last two weeks. During this time period, we saw the Dollar surge, gold/oil plunge and stocks remain flat. While the plunge in commodities is positive for bonds, it appears that supply concerns and the better-than-expected employment report weighed more. An important support test around 118-119 is at hand now. A break below 118 would be bearish.
The surge in the Dollar weighed on gold over the last two weeks. However, Gold-Continuous Futures ($GOLD) is nearing the 38% retracement and becoming oversold after a $100 decline in eight days. We do not need a momentum oscillator to determine that gold is oversold at this stage. The 38% retracement mark is the first place to look for a bounce. Should the Dollar continue to its next resistance around 77.5, gold may correct further towards 1075, which is the 50% retracement.
Oil broke below support last week and plunged to 70 before getting an oversold bounce. I view the support break as bearish overall, but we could see a rebound back to broken support in the 75-76 area.
Even though the wedge breakout failed to hold, I remain bullish on bonds because support is at hand. The 30-year Treasury Bond ($USB) hit resistance around 123 and plunged over the last two weeks. During this time period, we saw the Dollar surge, gold/oil plunge and stocks remain flat. While the plunge in commodities is positive for bonds, it appears that supply concerns and the better-than-expected employment report weighed more. An important support test around 118-119 is at hand now. A break below 118 would be bearish.
About the author:
Arthur Hill, CMT, is the Chief Technical Strategist at TrendInvestorPro.com. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London.
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