The strengthening dollar should see commodities weaken. Reversal below 315 would indicate respect of the descending trendline — and another test of primary support at 295. Breakout is unlikely, despite the rise of crude oil, but would indicate that the down-trend is weakening.
* Target calculation: 295 – ( 325 – 295 ) = 265
CRB Commodities Index is testing the descending trendline at 320. Breakout would suggest that the down-trend has weakened and the index is forming a bottom; respect would indicate another test of primary support at 295. Breach of the long term rising trendline would warn of another test of 2009 lows at 200.
Brent crude is also testing its descending trendline, at $110/barrel. Respect would signal another test of primary support at $99, while breakout would suggest that the down-trend has ended. In the long-term, breach of the rising trendline would warn of a decline to around $70/barrel.
The Dollar Index retraced to test the new support level at 76.00. Respect would confirm the primary up-trend, while failure would signal trend weakness. A trough above zero on 63-day Twiggs Momentum would strengthen the bull signal.
* Target calculation: 80 + ( 80 – 76 ) = 84
Gold broke through $1700/ounce in response to dollar weakness. Expect retracement to test the new support level. Respect would signal a primary advance to 1800*. The long-term (primary) trend remains upward.
* Target calculation: 1700 + ( 1700 – 1600 ) = 1800
The Amex Gold Bugs Index is testing medium-term resistance at 560. Breakout would test the upper border of broadening wedge pattern — around 650 — and support a similar advance for the spot metal.
Brent crude is also stronger, testing its upper trend channel at $110/barrel. Respect would indicate another test of the lower channel — and the ascending long-term trendline — while breakout would signal an advance to $120*.
* Target calculation: 110 + ( 110 – 100 ) = 120
The broader CRB Commodities Index is also headed for its upper trend channel. The ascending primary trendline remains intact but 63-day Twiggs Momentum respect of the zero line (from below) warns of a strong down-trend.
Brent crude is edging lower in a wide trend channel. Respect of the long-term ascending trendline (on the weekly chart) would suggest upward breakout from the channel — and a target of $150/barrel*. Recovery of 63-day Twiggs Momentum above zero would strengthen the signal.
* Target calculation: 125 + ( 125 – 100 ) = 150
The CRB Commodities index is similarly testing its long-term rising trendline at 300. Penetration of the secondary descending trendline would indicate another primary advance on the monthly chart. The 63-day Twiggs Momentum peak below zero [R], however, warns of a primary down-trend. Failure of support at 290 would strengthen the signal.
* Target calculation: 370 +( 370 – 290 ) = 450
Brent Crude rallied off support at $99/$100 per barrel, headed for a test of the upper trend channel. 63-Day Twiggs Momentum above its descending trendline warns that the down-trend is weakening. Breakout above the upper channel would test the 2011 high of $125/barrel.
CRB Commodities Index similarly rallied off support at 300. 63-Day Twiggs Momentum is still declining and failure to reach the upper trend channel (on the price chart) would warn of an accelerating down-trend.
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CRB Commodities index broke out below its trend channel and is now retracing to test the new resistance level. Respect of resistance at 300 would confirm the breakout and warn of an accelerating down-trend. The 63-day Momentum peak below zero indicates a strong primary down-trend.
CRB Commodities Index is testing support at 300 and the lower border of its trend channel. 63-day Twiggs Momentum holding below zero indicates a strong primary down-trend. Breakout below the trend channel would warn of a sharp decline, with a target of 260*. Respect is less likely, but would indicate a rally to test the upper trend channel.
* Target calculation: 300 – ( 340 – 300 ) = 260
Canada’s Loonie and the Aussie Dollar are both closely linked to commodity prices. A fall in the CRB index would lead to similar falls in the two currencies. CAD breakout below $0.9650 would signal a test of $0.94*.
* Target calculation: 1.00 – ( 1.06 – 1.00 ) = 0.94
Both currencies commenced a primary down-trend when they broke parity. An Aussie Dollar breakout below $0.97 would offer an identical target of $0.94*.
* Target calculation: 1.02 – ( 1.10 – 1.02 ) = 0.94
The CRB Commodities Index gapped down to its lower trend channel in response to turmoil in Europe and the resulting stronger dollar.
The Aussie followed its Canadian counterpart below parity, confirming a primary down-trend with an initial target of $0.94*.
* Target calculation: 1.02 – ( 1.10 – 1.02 ) = 0.94
The Aussie Dollar is testing support at $1.045 against the greenback; failure would warn of another down-swing to parity*. Breakout above $1.075, however, would re-visit $1.10.
* Target calculation: 1.05 – ( 1.10 – 1.05 ) = 1.00
AUDUSD is strongly influenced by commodity prices and closely tracks the CRB Commodities Index. $CRB is rising and breakout above 350 would indicate a primary advance to 385* — suggesting increased support for the Aussie Dollar.
* Target calculation: 350 + ( 350 – 315 ) = 385
The CRB Commodities Index threatens a breakout above its trend channel, while 63-day Momentum crossed above zero. Neither is of much consequence yet, but retracement that respects support at 335, or a Momentum trough that respects the zero line, would warn that the down-trend is at an end.
* Target calculation: 315 – ( 330 – 315 ) = 300
