Dollar bounce, gold and copper retrace

By Colin Twiggs

September 27th, 2012 12:30 a.m. ET (2:30 p:m AET)

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The Dollar Index is retracing to test resistance at 81.00/81.50. Respect would confirm the primary down-trend, as indicated by 63-day Twiggs Momentum below zero.

* Target calculation: 81 - ( 84 - 81 ) = 78

Spot Gold is retracing below resistance at $1800 per ounce*. A 63-day Twiggs Momentum trough above zero would signal a primary up-trend. Breakout above $1800 would confirm, indicating rising inflation expectations in response to QE3.

* Target calculation: 1650 + ( 1650 - 1500 ) = 1800

Copper is also retracing. Respect of 8000 would be a bullish sign. Again, a 63-day Twiggs Momentum trough above zero would indicate a primary up-trend. Breakout above 8600 would confirm, indicating that global economic activity is reviving. Failure of support at 8000 would suggest the opposite.

Brent Crude is falling after breaking support at $112 per barrel. 63-Day Twiggs Momentum below zero warns of a primary down-trend. The fall, despite increased inflation expectations, reflects slowing economic activity rather than increased security. Syria and Iran remain concerns in the Middle East. Test of support at $100 would warn of another down-turn.

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