What happen at 6 PM as the commodities markets opened? Did the Chinese Rate Hike contribute to this dramatic collapse? $11 or 0.8% drop in less than one hour.
Look at the recovery? It will be interesting to see if this rally be break to a new high, if not gold / silver might be in some trouble. I am a bull long term on metals and hope that later February or March 2011 will be a good time to trade metals. I think a solid correction to 1250 - 1300 is in the works for gold. Then it will continue upwards.
Below are a couple major currency pairs I like to follow.
AUDJPY
Momentum is down and it looks like a pull back is in the works for AUDJPY. If the correlation between S&P500 and the AUDJPY holds this means that the S&P500 will also pull back.
This next 2-4 weeks will be very interesting to see play out.
EURUSD
The 200 MA is providing support however, this support could be short lived. If markets in the US start turning, Euro zone could be in for a sizable decline. Ireland, Greece, Spain, and Portugal are still weight on the markets. If this 200 MA support breaks it would be expected to see a 1.26 eurusd in a few weeks.
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