Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Euro, USD, Gold and Stock Index Analysis

Stock-Markets / Financial Markets 2010 Dec 01, 2010 - 02:46 PM GMT

By: Bari_Baig


Best Financial Markets Analysis ArticleThe Good Days: From the get go, today seemed like a good day. A day, when most things fall in place almost perfectly and should I emphasis without much effort. Same could be said about the investment world. Regardless of the media’s hype about EU debt crisis or the Wiki Leaks which surely aren’t investment world’s secret “cables”, even the global markets are breathing a sigh of relief and optimism as even the BEARs amongst us know, a Bull market is just more fun!

Starting from Euro, which earlier today traded high 1.29s [1.297 precisely] has managed to push itself back over 1.31 and as we write a rumor came straight from a top of the tallest skyscraper of a possible U.S support to IMF for European Bailout. Well, we can’t vouch for the authenticity of this news nevertheless just as the rumor came, Euro was testing its neckline of the bottom that it had made in early Asian trading so on technical grounds the leg up was a mere continuation pattern so to speak. Euro had really become too oversold and even with this upward move to 1.315 not much has changed. That surely doesn’t mean that one should forget everything and jump off the proverbial cliff of optimism thinking they’d survive the jump, just because they have “optimism” on their side. We see Euro pushing on further with primary resistances starting from 1.3225 and therefore anything over low 1.32s should be capitalized by selling into Euros and not adding to Longs. The downward “Channel” which Euro is following has the upper side capped at 1.337 but to us this wave of optimism would start hitting the rocks much before that as Euro hits the “Major Resistance” region.

Euro may not start the downward leg immediately but the most likely scenario would be a sideways trend which may eventually coincide or just run short of the upper channel line. So, we say “Go Bulls” for 2 days at most and have those stops in place because when this “Giant” starts roaring it could shatter the ear drums as while being within the confines of this channel Euro could post a new low of just below 1.25s.

Now, moving on to gold which as we had stated yesterday in our article [Could Gold Replace Euro], finds itself at the very centre of the precious metal stage. Gold in Euro terms has smartly risen and is now making new highs, however, in terms of U.S Dollars it is still short by $35 per oz from hitting the record high it posted back in November 9th of $1,425 nonetheless, keeping in view how violent Gold’s move have been in past several weeks to imagine whether gold could take out the high tomorrow or day after isn’t difficult to comprehend.

Until yesterday techies “Technical follower” where very much of the view that Gold might have been tracing out a typical head and shoulder pattern, it was a false alarm! One which looked very convincing but it is now no more valid and hence we should move on. Gold is going to maintain its high bid status but at the same time it would run into turbulence as it approaches the record highs most likely beginning of coming week. In the next two sessions we see Gold trading $1,405 or at breach of $1,400 per oz at least maintaining it steadily for the coming week. Once the high is broken gold prices could quickly accelerate upwards to high $1,470s at which point Gold would start on a corrective phase. Gold has been discounting the inverse correlation with U.S Dollar lately nevertheless we find Green Back Index [DXY] which seems to have completed its leg up after the break of 79.6 to mid 81s to be in a sideways consolidative pattern which would further make things easier for Gold as it proceeds ahead.     

In the Gold chart we can clearly see RSI inches away from breaking the downward trend on a daily chart and the H&S pattern being violated as well. The chart of U.S Dollar index shows clearly the second leg has been completed and before prices move upward to low 83s it should first consolidate.

The economic data which came out of U.S was better than street’s guesstimates. The Chicago purchasing Manager’s report came at 62.5 up by 1.9 from last month. The Conference board’s consumer confidence index also rose by 3.9 to 54.1 beating the street’s expectation by 2.1 index points. As the data is out therefore we do not see any sudden upward move in the index and at best see consolidation as already stated above. Between high 79s and low 80s would be a good region to start buying into the Index.

Lastly, let’s have a look at U.S equities which much like other indexes around the world have had a bumpy ride since early last week. As we wrote in our article [The Commodities and Equities Circus] dated November 24th on that “U.S equities to us seem to be moving like a rudderless ship which is being tossed about by the waves which in this case the ever changing news”.  The circus of 1 day gain versus 1 day loss now seems to have ended, finally! It sure looks that way nevertheless we’d give it one more day before we can be sure as there’s no substitute of a test meaning the Dow could trade high 11,100 or more precisely a 11,186s. A pull back from thereon would further put strength into the trend. As Fed’s Beige book shows a brighter picture with improving conditions in manufacturing, hiring and retail spending, U.S equities might very strike gold as they head towards new highs.

The graph above shows RSI and the trend to be leaning towards the upside. Fingers crossed.

By Bari Baig

© 2010 Copyright Bari Baig - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in