Gold is breaking out above our focus level of $890/oz, as it currently trades $902/oz. The entire move down from the March high subdivided into 3 bid waves down, signature of a correction. So following the trendline break through $890/oz, we need to start looking back up the mountain looking for waves of 5. The immediate target is $952/oz.



The dollar is weakening in agreement with the gold breakout after the 1.5530 break on 3-hour EUR/USD chart. With help from a fellow wave surfer at a prominent investment bank, I have redone my EUR/USD count to label the consolidation in the previous few sessions as a triangle B. I was leaning towards a triangle 4 down, but intermarket relationship suggests this is not the preferred count.

it appears that the USD Index daily count of a coming 5th wave down is now taking effect. The USD is getting hammered here this morning as commodities are enjoying a nice rally. The S&Ps are still below 1420 resistance and are at least acknowledging the destruction that USD/JPY is receiving today. But referring back to what I was saying yesterday, the yen carry/equity relationship does in fact seem to dissipating.

As far as trades go, the EUR/USD break happened way too quickly for me to prepare anything in advance. I was long EUR/USD from the 1.5540 break and have scaled out into the move up to 1.5580. I have nothing working currently, but I am hopeful for next week as the market seems to be finally sorting itself out.



Todd Gordon is a Technical Currency Strategist and Fund Trader with GAIN Capital Group.

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The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.