Markets Update: Targeting $1.20 Euro, Bullish Oil And Silver
Tim Knight | Jul 28, 2014 11:36PM ET
Last time I was looking at EUR/USD I said that I was expecting a test of rising wedge support in the 1.35 area. EUR/USD made that and then slightly lower to test the 200 DMA, so the rising wedge is now broken. Unless we see a fairly fast recovery to new highs I’m now looking at targets for EUR/USD in the mid-1.20s. I’ve been watching this setup for months in the expectation that there should be a strong USD rally at the end of QE3. I’m now expecting this to resolve down. EUR/USD weekly chart:
I’ve had a look at my May projection for the iShares Barclays 20+ Year Treasury Fund (ARCA:TLT) and have adjusted that for the rising channel that has since been established. The obvious next target is channel resistance in the 117.5 to 119 area, depending on the time taken to reach that rising trendline. TLT daily chart:
Oil has retreated sharply recently and may retrace a bit further. Overall though I have the United States Oil Fund (NYSE:USO) in a rising channel from the 2012 low, and my overall bias remains bullish, with the obvious bigger picture target at the 2012 high at serious resistance, just over 42. I have a possible retracement target in the 35.5-36 area, which should match up with CL support in the 97/8 area. USO daily chart:
The overall picture on Silver looks bullish, with a possible double-bottom forming and declining resistance from the 2011 high broken. Short term though the RSI setup is bearish and silver is currently making lower highs and lows. The next obvious target is under 18.61 and may retest broken declining resistance from the 2011 high in that area. Silver daily chart:
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