Gold is at a 'make or break' point for me. It either gets its act together or goes back to where it came from ( below 1700!)
The same can be said of EURUSD. I must confess is was stopped out last early last week on my short Eur position and then sat and watched all week the most unreal rally upto the mid 1.42 level. The same can be said of equity markets and the sad fact is that they now move in their own world which bears little refelction on the shocking fundamentals out there. Being somewhat of a cynic i have as much hope the in the Euro zone and Euro bailout and the possbility of fiscal prudency as a pig would have hope in a slaughterhouse. However i am a realist and realise there are huge quantities of cash piling up in various funds banks and institutions where those who work in these places have itchy fingers and are just waiting to pile back into equities as there is a limit to treasuries and cash held and they never have been good at diversification. This is one reason i would not be surprised to see higher levels in the indices however the Euro reminds me of the old phrase "you can polish a piece of sh*t until it shines and warap it up in a box and tie a bow on the box but it is still remains a piece of sh*t". Price behaviour has remained weak today and I am looking for a retracement back to 1.3850 but the reaction line in the chart below remains stubborn and we are moving sideways before a break either up or down. What i think is going to happen is that the whole Euro scenario will play out over months and years as opposed to days and weeks.
I will look to short any EURUSD rally but am unhappy going short at this level of approx 1.40
Watch and wait both Gold and EURUSD.
The USDX has bounced beautifully off reaction line support but is now struggling to get is head above 76.40....however i suggest that the price pattern looks bullish for at least a short term trade and will watch and breakout with care
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