Watch This Market When You Trade The Dollar
Our bullish call on the dollar this
week has worked out very well so far. In fact, it was the completed
“five wave†move in gold last week that gave a very good hint at a reversal in
USDX as it tested key support at 87 on Friday.
However, the continued strength in gold in the face of the dollar’s rally this
year suggests the present pullback in gold will again be met with solid demand
at the $445/$435 for the December contract (YG Z5 on eSignal) and $440/$430 in
spot.
There is a confluence of Fibonacci retracements sitting at this level with a
.382 retracement from the pivot low on July 27 at 428.5 to the high of 455 on
August 12. This coupled with a .618 retracement using the low on August 9 at
438.5 to the same high provides a solid buffer of price support.
Moving averages from various time frames are also doing a nice job of matching
up with the Fibonacci support. In addition, the 444-445 area marks of a former
pivot high. As we have said before, markets like to return to the seen of the
crime, and a retest of this level and subsequent move higher would confirm the
bullish trend in gold. If $430/$440 holds it would set up a move to the $460 an
ounce level which matches up with the last two measured moves and possibly a
move to $500 an ounce if our wave count is correct. As we tell subscribers, we
like phasing in to our trades and will look to add to this trade when it breaks
the $450 highs.
Finding markets which match up on a number of key technical levels gives you the
best chance to succeed. Gold right now is giving a number of positive technical
signs at this key inflection point. However, a sustained break below $7.00 in
silver would raise a red flag to our bullish gold forecast and we are watching
this level closely!
Regards,
Jes Black
FX Money Trends
613 4th St Suite 505
Hoboken, NJ 07030
Tel: 646.229.5401
Jes
Black is the fund manager at Black Flag Capital Partners and Chairman of
the firm’s Investment Committee, which oversees research, investment and
trading strategies. You can find out more about Jes at
BlackFlagForex.com.
Prior
to organizing the hedge fund he was hired by MG Financial Group to help
run their flagship news and analysis department,
Forexnews.com. After four
years as a senior currency strategist he went on to found
FxMoneyTrends.com – a research firm catering to professional traders.
Jes
Black’s opinions are often featured in the Wall Street Journal, Barrons,
Financial Times and Reuters. He has also written numerous strategy pieces
for Futures magazine and regularly attends industry conferences to speak
about the currency markets.