Category: US Dollar Index

The Dollar Index is testing primary support at 81.00/81.50. Failure would signal reversal to a primary down-trend. Reversal of 63-day Twiggs Momentum below zero would also suggest a reversal, while respect of the zero line would indicate continuation of the primary up-trend.

* Target calculation: 82 + ( 82 – 78 ) = 86

Spot Gold is retracing to test its new support level after breaking resistance at $1650 per ounce. Respect of $1640 would confirm the primary up-trend. Respect of the zero line by 63-day Twiggs Momentum would strengthen the signal. Reversal below $1640 is unlikely but would indicate a false signal and re-test primary support at $1525.

* Target calculation: 1650 + ( 1650 – 1500 ) = 1800

The CRB Commodities Index is retracing after breaking medium-term resistance at 305. Recovery of 63-Day Twiggs Momentum above zero suggests a trend reversal, but only a trough above zero would confirm.

Brent Crude retreated from resistance at $115 per barrel. Reversal below $108 is unlikely, but would signal another test of support at $100. Breakout would indicate a test of the March high at $126. 63-Day Twiggs Momentum recovery above zero would strengthen the bull signal.

Colin Twiggs

Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.

Raised expectations of further quantitative easing by the Fed caused the Dollar to fall sharply. Penetration of the rising trendline by the US Dollar Index would warn that a top is forming. Reversal of 63-day Twiggs Momentum below zero would suggest a primary trend reversal. Respect of support, however, would indicate that the market overreacted and the primary trend will continue.

* Target calculation: 82 + ( 82 – 78 ) = 86

Spot Gold broke resistance at $1650 per ounce, indicating  a primary up-trend. Recovery of 63-day Twiggs Momentum above zero strengthens the signal. A trough above zero or retracement that respects the new support level would confirm the breakout, suggesting an advance to $1800.

The CRB Commodities Index also benefited from the weaker dollar, breaking medium-term resistance at 305 to indicate a test of the February high at 325. Recovery of 63-Day Twiggs Momentum above zero suggests a trend reversal, but only a trough above zero would confirm.

Brent Crude continues to test resistance at $115 per barrel. Breakout would indicate a test of the March high at $126. Reversal below $108 is unlikely, but would signal another test of support at $90/$100. 63-Day Twiggs Momentum recovery above zero would strengthen the bull signal.

Colin Twiggs

Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.

The US Dollar Index made a false break above resistance at 83.50 before retracing to test support at 81.50. Respect of support and the rising trendline would confirm the primary up-trend is intact. Breakout above 83.50/84.00 would signal an advance to 86.00* in the next few weeks and to the 2010 high at 88.50 in a few months. Another 63-day Twiggs Momentum trough above zero would reinforce the healthy up-trend. Failure of support at 81.50 is unlikely, but would warn of a trend reversal.

* Target calculation: 82 + ( 82 – 78 ) = 86

Spot Gold continues to consolidate on the weekly chart between $1530 and $1650 per ounce. 63-Day Twiggs Momentum below zero warns of a primary down-trend. Recovery above zero, however, would confirm that a bottom is forming. Breakout below primary support at $1530 would offer a target of $1300*; recovery above $1640 would indicate an advance to $1800.

* Target calculation: 1550 – ( 1800 – 1550 ) = 1300

The daily chart displays a symmetrical triangle formation. Breakout would indicate direction of the next primary move. The failed down-swing — with a reversal short of the lower border — suggests an upward breakout. Follow-through above 1640 would confirm.

The CRB Commodities Index broke its descending trendline, indicating that a bottom is forming. Breakout above medium-term resistance at 305, strengthening the signal, would test 325. Reversal below 295, however, would suggest another test of 265. Recovery of 63-Day Twiggs Momentum above zero would also suggest a primary up-trend.

Brent Crude has already penetrated its descending trendline, suggesting that a bottom is forming. Follow-through above $108 strengthens the signal. Recovery of 63-day Twiggs Momentum above zero would indicate a primary up-trend, while a peak below zero would signal a decline to $75 per barrel*.

* Target calculation: 100 – ( 125 – 100 ) = 75

Colin Twiggs

Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.

The US Dollar Index continues to respect support at 81.00, indicating another test of resistance at 83.50 on the Weekly chart. Breakout would offer a target of 86.00*. 63-Day Twiggs Momentum oscillating above the zero line indicates a healthy up-trend.

* Target calculation: 82 + ( 82 – 78 ) = 86

Spot Gold similarly respected support at $1530 per ounce and is headed for a test of $1640/$1650. Confidence in the introduction of QE3 has strengthened support. Breakout above $1640 would indicate a rally to $1800. 63-Day Twiggs Momentum below zero, however, warns of a primary down-trend. Breach of primary support at $1530 would confirm.

* Target calculation: 1550 – ( 1800 – 1550 ) = 1300

The 2-Hour chart displays a flag formation over the last two days. Upward breakout (above 1620) would signal a test of $1640.

* Target calculation: 1620 – ( 1620 – 1600 ) = 1640

Brent Crude retraced sharply to test resistance at $100 per barrel, fueled by rising hope of recovery in Europe and tensions with Iran. Penetration of the declining trendline would suggest that a bottom is forming. Respect of resistance, however, would indicate a decline to $80, with the long-term target at $75*. A 63-day Twiggs Momentum peak below zero would strengthen the bear signal.

* Target calculation: 100 – ( 125 – 100 ) = 75

Crude is not the only commodity driving prices higher. The CRB Non-Energy Commodities Index is testing its upper standard deviation channel. Breakout would indicate that a bottom is forming. Recovery of 63-day Twiggs Momentum above zero would complete a bullish divergence, indicating reversal to a primary up-trend. Respect of the upper trend channel, on the other hand, would indicate a decline to 240*.

* Target calculation: 260 – ( 280 – 260 ) = 240

Colin Twiggs

Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.