- Treasury yields find support
- Euro signals a primary down-trend
- Dollar continues to strengthen
- Gold weakens
Interest Rates and the Dollar
The yield on ten-year Treasury Notes recovered above 2.50 percent, suggesting that a bottom is forming. Follow-through above 2.65 would strengthen the signal. Reversal below 2.40, however, would confirm a decline to 2.0 percent*.
* Target calculation: 2.50 – ( 3.00 – 2.50 ) = 2.00
The Euro broke primary support at $1.35, signaling a primary decline with a target of $1.30*. Reversal of 13-week Twiggs Momentum below zero confirms the down-trend. Recovery above $1.35 is unlikely, but would warn of a bear trap.
* Target calculation: 1.35 – ( 1.40 – 1.35 ) = 1.30
The Dollar Index rallied on strong GDP figures, testing resistance at 81.50. Breakout is likely and would signal a primary advance with a target of 84*. Recovery of 13-week Twiggs Momentum above zero indicates a primary up-trend. Reversal below 80.50 is unlikely, but would warn of another test of primary support at 79.00.
* Target calculation: 81.50 – ( 81.50 – 79.00 ) = 84.00
Gold
Gold is testing support at $1295/$1300. Failure of support would warn of a primary down-trend. Breach of $1240/$1250 would confirm. Recovery above $1350 is unlikely at present, but would indicate another test of $1400/$1420. Reversal of 13-week Twiggs Momentum below zero would strengthen the bear signal, but oscillation close to the zero line presently signals hesitancy.
* Target calculation: 1200 – ( 1400 – 1200 ) = 1000