Overview:
- Treasury yields weaken
- The Dollar weakens
- Gold rallies
Interest Rates and the Dollar
The yield on ten-year Treasury Notes is headed for another test of primary support at 2.50 percent. Follow-through below 2.40 would would signal a decline to 2.00 percent*. 13-Week Twiggs Momentum continues below zero, indicating weakness. Recovery above the descending trendline is unlikely at present, but would suggest another attempt at 3.00 percent.
* Target calculation: 2.50 – ( 3.00 – 2.50 ) = 2.00
The Dollar Index retreated below resistance after a false break above 80.50. Recovery above 80.50 would suggest an advance to 81.50, but respect of zero by 13-week Twiggs Momentum warns of continuation of the primary down-trend.
Gold
A weaker Dollar helped gold break its descending trendline, ending the correction. Expect a test of $1400. Whipsawing of 13-week Twiggs Momentum around the zero line, however, indicates indecision and reversal below zero would warn of further weakness. Retreat below $1280 would warn of a test of primary support at $1200.
