Price of Gold anticipated to pause briefly

Two weeks ago I announced that if the market had sufficient strength and momentum to breach R1 (950-960) convincingly, R2 (976) would be the next logical upside target. That target was surpassed and there is now a three month high at 990.

Price is currently at 969.50. I anticipate that gold will pause briefly with sideways activity before a testing the February 20th, 2009, high of 1006. and the March 17th, 2008 high of 1032.50.

A downside break below 930. would force a reconsideration of this outlook.


Daily Gold chart as at 4 June 2009 using NextVIEW Advisor. Click on chart for larger view.

TECHNICALS
MACD – in positive territory with weakening momentum
Stochastic – dropping down from it’s overbought level.
Li’s Sandwich – the top line indicates potential resistance, and the bottom line indicates potential support.
R1 – immediate resistance at 990.
R2 – 2006
S1 – a zone of support from 946-930.
S2 – 912.

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Article and Commentary by Don Schellenberg. A trader and trading coach, he is a noted expert on Market Structure, Elliott Wave and Fibonacci. He trades the forex market.

FOREX: EUR/USD Analysis

On May 20th I wrote in this column as follows: ‘In any case there is a strong possibility that the market will reach to around 1.4170-1.4200 within the next couple of weeks’.

On June 1st EUR/USD reached and exceeded that level and on June 3rd created a five month high of 1.4338.

Market strength has tapered off somewhat. A few days of sideways correction is very probable. The market has reached a level of potentially strong resistance and fallen back slightly from there. If the market drops below the closest rising trend line marked on the chart, a larger correction could ensue.

On the up-side there are other attractive targets such as the resistance zone from 1.4620-1.4660. That area should be watched carefully as it could be a major turning point. However as long as the rising trend line is not penetrated convincingly, upside targets will still be within range.


Daily EUR/USD chart as at 4 June 2009 using NextVIEW Advisor. Click on chart for larger view.

TECHNICALS

Stochastic – in over bought level.
MACD - rising, but with weaker momentum
SMA200 – flat around 1.3170.
EMA20 – rising
TL1 – the lower, rising trend line.
TL2 – currently the rising trend line closest to price.

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Article and Commentary by Don Schellenberg. A trader and trading coach, he is a noted expert on Market Structure, Elliott Wave and Fibonacci. He trades the forex market.

Hong Kong Hang Seng: Strong upward momentum

No market in the region shows very strong bullish sentiment like in Hong Kong. The equity market continues to make new highs and breaking a few technical resistances in a month. The HSI closed at 18,171.00 points at the end of May, surging 21 percent in a month. So far, the HSI has climbed 60% from the low in March this year. Investors are confident about the recent economic developments which are expected to improve its economy.

The HSI becomes very bullish once it broke the 15,900 points resistance level. There was no major pullback in the current uptrend rally despite being overbought for weeks. Investors and traders are picking up stocks at slight pullbacks are most of them do not want to miss the current wave. The momentum indicators are indicating strong upward momentum which means that there is a high chance that the HSI testing the next resistance level at 19,150 points, a 38.2 percent Fibonacci retracement level from the longer term bearish trend since October 2007. Immediate support level is at 17,680 points while stronger support level is at 15,700 points.

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Article contributed by Private Trader, Market Expert, Trading Coach and Chief Market Strategist of Nextview, Mr. Benny Lee. For more articles and commentaries from Benny, click HERE.

Singapore STI: Likely to test next resistance level at 2,400 points

Market sentiment and confidence in Singapore seems to be getting even stronger by breaking the 2,000 points resistance level and closing at a 7-month high. The benchmark FTSTI closed at 2,329.08 points at the end of May. The index has climbed 56.8 percent from the low in March. Market continues to be bullish despite weaker technical indications. Investors are responding to recent economic developments both locally and internationally. Total manufacturing output of Singapore in April rose 24.7 percent on month.

The next resistance the benchmark index would most likely be at 2,400 points, the 38.2 percent Fibonacci retracement level from the longer term bearish trend since October 2007. There were no major correction from the current bullish trend and the market is climbing exponentially. The momentum indicators are still in divergence which means weaker up trend but there is a high change of the index testing the Fibonacci retracement level above. There has to be more positive catalysts to push the market beyond this level. Support level is currently at the previous resistance level at 2,000 points.

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Article contributed by Private Trader, Market Expert, Trading Coach and Chief Market Strategist of Nextview, Mr. Benny Lee. For more articles and commentaries from Benny, click HERE.

KLCI: Higher Level of Investors Confidence

The equity market has been on a very bullish mode since March this year. The KLCI went as high as 1059.88 points before settling at 1,044.11 points at the end of May. The KLCI has increased about 24 percent since March. Investors were not taken aback by the weaker than expected quarterly GDP growth. The government announced a 6.2 percent contraction for the first quarter and revised the GDP forecast for the year 2009 to contract between 4 and 5 percent. The rally in KLCI is in tandem with the rally in the regional markets with most of these markets climbed more than 50 percent from the March low. However, trading volume has decreased for the last two weeks of May indicating a little uncertainty.

The KLCI broke and stayed above the psychological resistance level of 1,000 points and this indicates high level of investors’ confidence. The next resistance is at 1,080 points, the 38.2 percent Fibonacci retracement level from the long term bear trend since January 2008. With the current momentum, there is a high chance of price testing this level. To be able to go beyond this level requires more positive catalysts. Technical support level is 1,000 points, the previous resistance level.

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Article contributed by Private Trader, Market Expert, Trading Coach and Chief Market Strategist of Nextview, Mr. Benny Lee. For more articles and commentaries from Benny, click HERE.

US DOW: More Upside if breakout above 8,600 points

The US market has been moving sideways with a tight trading range last month after breaking the resistance levels of 8,170 and 8,300 points. The DJI closed at 8500.33 points end May after trading between 8,250 and 8,580 points. The DJI has increased about 30% from the March low. Market is a little uncertain because key economic indicators such unemployment rate continues to rise and the mortgage crisis that has now moved toward prime mortgages creates a little fear in investors on whether the economy is really improving. The market was earlier boosted by better than expected monthly corporate earnings.

The DJI has retraced about 28 percent from the longer term down trend since October 2007. The next significant retracement level is the 38.2 percent Fibonacci level which is at 9,420 points. With a strong bullish momentum and sentiment there is a high possibility of the DJI climbing to this level because most markets have retraced near this level. A break above the current resistance level in this trading range at 8,600 points would boost this possibility. However, expect more downside move if the support level of this trading range at 8,250 points is broken. The next support level is at 7,900 points.

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Article contributed by Private Trader, Market Expert, Trading Coach and Chief Market Strategist of Nextview, Mr. Benny Lee. For more articles and commentaries from Benny, click HERE.