A we approach the semi annual testimony of the Federal Reserve Chairman, Ben Bernanke, we find the commodities are at a major inflection point. We are basically “make or break” levels. I wanted to point out these levels since what happens today, and the price action that follows may leave us a few days of continued movement in either direction.
As you can see above, the AUD and NZD/USD and the USD/CAD are at major levels. But what is more important to me is the daily chart of gold (seen below). If Gold produces a bear flag formation today and breaks below 1585 we could see a continuation of USD strength, despite it being overbought. Don’t forget, the USD/JPY was very overbought on the daily chart from 88.00 to 94.00.
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Disclaimer: I am long the USD against the AUD, NZD and CAD and have been for weeks