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The Dollar Index's Rally Off Its Target Has Established a Low

By: Minyanville
Posted: 5/2/2013 3:10:00 PM
Referenced Stocks: FXE;GLD;SLV;UDN;UUP

The following are the latest daily summaries of my ongoing intraday coverage, providing context to interpret price action. Any prices listed are for a contract's current "front month." Their direction tends to correlate with any ETFs listed for each.

Today's Highlight: The US Dollar Index rallied sharply Thursday after Wednesday's low finally touched its long-awaited target.

Dollar Basket
Jun Contract DX; (NYSEARCA:UUP), (NYSEARCA:UDN)
Wednesday's early test of the 81.40 target had already satisfied long-standing selling pressure, facilitating a violent reaction up Thursday to test 82.40. The bounce could extend to 82.80 if 82.15 were to hold as support.

Eurodollar
Jun Contract EC; (NYSEARCA:FXE)
Thursday's plunge to 1.3040 all but negates the 1.3325 target. Any rally must first close above 1.3105.

Gold
Apr Contract GC; (NYSEARCA:GLD)
Thursday's gap up from Wednesday's test of 1440.00 filled the gap back to Tuesday's 1473.00 close and held. Closing any higher would have started to signal the correction did not need to extend down to 1429.50 before recovering to 1532.50. Now a close above 1480.00 is required in order to prevent an even deeper drop from beginning.

Silver
May Contract SI; (NYSEARCA:SLV)
Gapping up Thursday from Wednesday's test of 23.25 support only filled the gap back to Tuesday's test of 24.20. A higher close would undermine resuming the pullback targeting 22.95.

30-year Treasury
Mar Contract US; (NYSEARCA:TLT)
The reaction down from testing the 149-14 target Wednesday extended down sharply at Thursday's open to probe briefly under the 148-28 sell signal. A quick recovery spent the balance of the session ranging narrowly around the 149-05 prior high.

Crude Oil
Apr Contract CL; (NYSEARCA:USO)
Wednesday's drop from 93.40 had immediately fulfilled the pattern's 91.00 target, without signaling any new pattern in-play. That didn't prevent (or even inhibit) Thursday from recovering back up through 94.00. A retest of the prior high up to 94.75 is likely, and closing above it would target 98.10.

Natural Gas
Apr Contract NG; (NYSEARCA:UNG), (NYSEARCA:UNL)
Wednesday's failed rally attempt from 4.44 down to 4.31 left the pattern extremely vulnerable, which Thursday's plunge to 4.02 proved. Closing positive after dipping Friday into the 3.95-4.00 range would be interesting for possibly bottoming, but there is no active pattern.


Editor's note: Rod's analytical techniques are designed to efficiently identify targets and turning points for any liquid stock or market in any time frame. He applies his techniques live intraday, primarily to S&P futures, at RodDavid .com .