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Euro's Rally Thursday Isn't the Sort That Will Reverse Down Soon


Take a look at today's action in currencies and commodities.

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 euro's rally Thursday isn't the sort of rally that reverses down soon. It's probably not yet peaked, either. But this pattern cannot afford too much hesitation before extending higher.

Dollar Basket
Not gaining any traction on the two prior sessions' rallies up to 80.75 made a reversal down to 80.20 likely. Thursday's gap down to 80.45 extended much lower to test 79.75. This leg should test 79.65-79.70, for its next critical test.

Mar Contract EC; (NYSEARCA:FXE)
Holding the 1.3050 pullback limit Wednesday made any initial strength Thursday likely to extend higher. Thursday's gap up to 1.3125 extended sharply higher to test 1.3275. This leg has room up to 1.3315 before being vulnerable to launching a new downleg.

Feb Contract GC; (NYSEARCA:GLD)
Wednesday's test of 1652.00-1657.00 did not actually chip away at its support. Thursday's open gapped up and extended higher to test 1675.00. Unless rejected back under 1666.00 without delay Friday, and then back under 1657.00 to reverse momentum down, this leg could extend up to 1720.00.

Mar Contract SI; (NYSEARCA:SLV)
Thursday's gap up above 30.50 extended higher intraday. That doesn't compensate for the delay when that price action was needed Wednesday to confirm Tuesday's surge. This sequence makes Thursday's surge less likely to extend higher. So, extending higher anyway would be bullish.

30-year Treasury
Mar Contract US; (NYSEARCA:TLT)
Thursday's reaction down from Wednesday's test of the 145-16 bounce limit tested 144-16 intraday. Closing back under 144-20 would confirm the corrective bounce had ended, and that momentum was reversing down to target 142-26/143-06. Closing above 145-16 would be bullish.

Crude Oil
Feb Contract CL; (NYSEARCA:USO)
Wednesday's inside day did not need an extra dip down to 91.25 to refuel buyers, after all. At least, not for the purpose of probing a fresh high, as Thursday's open did, up to 94.70. The pattern extended no higher intraday, and instead hovering narrowly at or above prior highs. Any delay in extending higher could put into play a deeper pullback than to only test 91.25.

Natural Gas
Thursday's rally helped to mitigate Wednesday's fresh low, but it is probably too soon to consider buying.

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.
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No positions in stocks mentioned.
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