The Yuan continues to test support at 14.5 US cents.
The Dollar Index recovered above support at 95. Respect of support would confirm another advance, with a long-term target of 103, but bearish divergence on the Trend Index still warns of selling pressure.
Gold is testing resistance at $1200/ounce but Trend Index peaks below zero warn of strong selling pressure. Respect of the descending trendline would indicate another decline with a long-term target of the 2015 low at $1050/ounce.
The Australian Dollar is plunging, having broken short-term support at 72 US cents. Trend Index peaks below zero indicate strong selling pressure. Expect a test of the 2015/2016 low at 70 US cents.
The falling Aussie Dollar may cushion local gold stocks, to some extent, from weaker gold prices but the All Ordinaries Gold Index (XGD) continues its downward path. Tall shadows on the last three candles flag selling pressure. Breach of short-term support at 4550 is likely and would offer a long-term target of 4000/4100.
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He founded PVT Capital (AFSL number 546090), which provides income and growth strategies to wholesale clients.
Colin also co-founded Incredible Charts and writes the popular Patient Investor newsletter.
Using a top-down approach, Colin identifies macro trends in the global economy and then combines fundamental and technical analysis to evaluate opportunities in sectors that stand to benefit.
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.
