Wednesday November 10, 2010 - 00:36:31 GMT
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Forex Hound - www.forexhound.com
Dollar Rally Triggers Gold, Silver Reversal Tops
December Gold and December Silver broke sharply after
investors shed risky assets amid an impressive turnaround in the U.S. Dollar.
Technically the closing price reversal top in Gold indicates
further downside pressure is likely. Based on the recent rally, expectations
are for a possible correction into $1370.00 to $1357.10. Often this type of
move is fast and furious and lasts 2 to 3 days.
The U.S. Dollar rose against the December Euro and December
British Pound as worries about Portugalâ€™s
ability to finance itself increased and demand dropped for risky assets and
commodities. The shift in risk sentiment is expected to continue as long as
issues about peripheral countries in Europe
persist. Traders are not waiting for confirmation, but instead are reacting to
the news as a precaution.
The weak close has put the Euro in a position to turn the
main trend down on the daily chart. Watch for a break through the last swing
low at 1.3698 go trigger an acceleration to the downside. The chart indicates a
break to a major 50% level at 1.3434 is likely over the near-term.
The British Pound broke sharply on Tuesday into a
retracement zone. The last main range is 1.5650 to 1.6298, setting up a
retracement zone at 1.5974 to 1.5897. Uptrending Gann angle support is at
1.5950. This angle moves up to 1.5970 on Thursday. This forms a support cluster
at 1.5974 â€“ 1.5970. A test of this cluster could attract new buyers.
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