A pause in the deflationary forces that led to the across the board US Dollar rally in the second half of 2008 has resulted in divergent paths for the EURUSD, gold, and silver in recent months. However, the position of resistance lines in the EURUSD and metals warns of the next US Dollar bull leg - and collapses in the EURUSD, gold, and silver.
[B]Euro / US Dollar[/B]
A false (non-Elliott) channel has formed from the March high. The top of the channel crosses through 1.3345 tomorrow but short term structure suggests that 1.3300 likely remains intact (the decline from that level is an impulse). When the EURUSD reaches the lower end of the channel, be prepared for a break.
[B]
Gold[/B]
Gold is also trading within a channel. After bouncing from the 200 day early last week, price is approaching an area stacked with technical levels. There is the 50%-61.8% of the decline from 970 along with the 55 day SMA and a potential resistance line drawn off of the February and March highs. The line crosses through 922 today. The trend is down as long as price is below 970 and the objective is below 692.
[B]
Silver[/B]
Today, silver spiked through a resistance line drawn off of the February and March highs. However, price has yet to close above the line. Structure is bearish as long as price is below the March high.