US dollar breaks all-important support levels on the longer-term charts
The US Dollar Index has broken all the important support levels on the weekly chart. We should now target two-year trendline support at 9060/50. Here we could see a small bounce but I would expect this level to break eventually targeting 8965/45 and probably the 2010 high of 8071. I would not be surprised to see the index fall as far as 8830/20 (and even lower in fact).
AUD/USD has beaten the previous high set in July this year at 8065. We should now target 8160/70 and 21-month trendline resistance at 0.8300/0.8310. This happens to coincide with the high for 2015 so will be the next main challenge for bulls.
USD/JPY continues lower after breaking the previous low for this year at 108.11 (set in April). We should target 107.50/45 and important longer-term Fibonacci support at 106.70/60. We also meet rising five-year trendline support at around 106.00. So this 70-pip area will be important (in the short term) as the pair becomes oversold on the weekly chart.
EUR/USD is now through the August high of 1.2069 to extend the bull run, which started right at the beginning of this year. The next targets are 1.2165/75 and 1.2220. We could eventually see 1.2270/80 and 1.2350/60.
Even the pound is getting carried higher on the weak dollar trend as we head towards the August high of 1.3264. Obviously this will need to be beaten to start the next leg higher in the 11-month recovery. The next target will be the 100-week moving average at 1.3400/20.
Gold has performed well since breaking above the previous double-top high at 1295 as we reach 1357 today. The next major target is the 2016 high and longer-term 38.2% Fibonacci resistance at 1375/80. We are getting overbought as you would expect after such a good run, so may see some profit-taking here. However, any sell-off is unlikely to see a big collapse and should offer better longer-term buying opportunities.
Finally, silver has started a bull run after beating the 100 and 200-week moving averages and the five-year trendline resistance, as you can see in the chart below. The next target is the 2017 high of 1859 where we also meet important 23.6% Fibonacci resistance at 1873 (obviously why we topped there last time!).
We should struggle but I do expect a break higher, eventually targeting 2000/2010 and the 2016 high of 2100/2110. But further gains are expected into next year. I really do think this is the start of a multi-year bull trend and would not be surprised to see silver outperform gold.
Technical Analyst & Trader
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