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Although not quite as bullish as runaway Silver, Gold certainly has potential to rally well above 400 this week, with 1387 seen as the turning point for the metal. We have noted the importance of the left shoulder high from early October at 1386.90 as the turning pit for Gold a number of times over the past few months, with chart pointing to 1408-1410 as the first major resistance for coming days. Even a weekly close at 1410 or so would set the stage for a new high for gold going in to early March (if not sooner) so unless there is a reversal and it closes below 1360 this week, chances are the next phase in the bull run will begin to see momentum build and prices rise. As a side note, Silver broke a fresh high, with little in the way of a barrier until 34.50-35.00. (It closed at 32.52, above the recent peak of 31.23
Posting a new multi year high, Silver looks set to rally on to 34.50-35.00 in the near term, with an advance to nearer 50 in coming months expected. An impressive move late last week places 34.50 to 35 as the main target for the near term, with first support for ’poor man’s gold’at 31 or so. This is a clear indication of the inflation rising inherent in the markets due to the questionable policies of the Fed, and indeed due to the huge increase in money supply and velocity in China, Europe and Japan.,
Another bad week for the USD, it needs some bad news from Europe, or so hawkish tones from the Germans if it is not to fail at the 77.39 support. Bernanke’s dollar failed to extending its bullish trend and closed below 78, which may see it trade in a tight range between a support at 77.39 and resistance at 78.21. Our suspicion is pointing north for the dollar provided that the resistance at 78.2 or so is taken out convincingly and test 79.00, midweek. Our target is at 78.60.
AUDUSDA breakout above 1.0170 will be a clear sign the risk trade has legs this week. The Aussie had a bullish week and closed strongly above the parity line, with the bullish trend set to extend to test a key resistance at 1.0255which may be tough to break. We suspect this pair may trade between that resistance and a key support at 1.0080. Our target is at 1.0194.
The German election cycle starts this week, and with Portugal ready to come back in the limelight, the chart may not move north as the candles suggest. The bulls look to coming back to the Euro again, and if we got purely by the charts, its next target is 1.3944 and the nearest support is at 1.3572. However watch for an early week failure to pass 1.3740 or so, because if it stalls here a snap pullback will occur, placing 1.3550 to 1.3600 or so as the first support of note.
GBPUSDGBPUSD has 1.6278 to 1.6298 as the first barrier, but given recent volatility, it may find it hard to pass at first attempt. Sterling gained quite a bit of ground last week, and another gradual climb should be seen. However there is a key resistance at 1.6278 and again a 1.6298 which should be challenged. If this level is taken early out it will expose the next target at1.6520.
Unless we see USDJY trading north of 85.40, risk of yet another pullback will remain high. The Banzai Warriors had a mixed week and closed at 83 and change It could be just a consolidation phase provided that a key support at 82.60 holds throughout the week. Given that scenario plays out then the optimum target is at 84.50.
Watch for a bounce off last ditch support near the 0.9300 level. It was a bearish week for the Swissy when it closed at 0.9456 and, an extension is on the cards. The nearest key support is at0.9299. We suspect adead cat bounce scenario will play out and that may expose the following resistances as targets; 0.9475 and 0.9587. Our target is at 0.9518.
Might be worth a a look for a decent rebound trade given the bullish looking precious metals charts. With Gold climbing, it managed to pull along the Loonie to close at 0.9858. •On the daily chart, we can see some bullish reversal candles; a morning star and at weezers bottom formed at the key support 0.9815. The bulls should be coming soon for this pair to test parity. Our target is at 0.9947.
Our swing trade call on Nikkei Futures given back in December 2010 gave 10,800-10,880 as the target which was squarely hit last week. A very decent swing trade has already played out, and for the days ahead we think there is risk of some consolidation on the Nikkei. If however SSI powers past 10.880, then the big 11k awaits.
The Korean market looks set to rally on to 268-270 or so, but beware profit taking if this range is hit very early in the week. Still struggling, the KOSPI futures should at the very least rally to 268-270, but if 263 fails to hold we can expect yet another test of key support nearer 260.
CBOT Dow Minis (YM0Y) The US markets are primed with almost free cash from the Fed, and it seems futile to short just yet. The locomotive of YM0Y doesn’t seem to be running out of steam given it closed at 12377. We got stopped out on all of our shorts the past 2 weeks. Possibly it will test 13000, the 2008 high before a much needed correction. However there are supports of interest and act as buy entry points at 12245 and 12345.
CBOT Nasdaq 100 (NQOY) A correction is so overdue, when it comes –probably due to a huge black swan event, run for the hills. The NQ0Y is the only index to buck the trend against YM0Y when it closed at 2395.25. On a weekly chart,there is an advance block pattern and its influencing our bearish sentiment on this index. We suspect that the key resistance at 2438.50 will hold the rise,thenour target will be at 2365.50.
CBOT S&P minis (ESOY)Bernanke wants it higher, and he’s got several hundred billion in free cash to prime it further. The bullish trend for ES0Y may take a breather soon even though it closed above 1340. We suspect that a correction is on the cards when we see an advance block pattern in the weekly chart. Possibly, it will spike up to test 1357.00 but might get bogged down nearer 1347.25.(HQM)