The week ending Black Friday 13th April 2007 may well go down as the feather that broke the U.S Dollar’s back. As the U.S Dollar closed below the support line of .8205 on the USDX Continuous Futures Chart “Gold” its inversely positioned itself to take out the most recent high (Comex Gold Futures) and resistant level of 692.50.
Should this occur there is daylight between the 693 top and the 732 top.
Thus such a move in Gold could be quite forceful overshooting to “Mr. Sinclair’s” temporary or minor top of 761.
With China’s emergence as an economic powerhouse U.S authorities attempt to toughen their stance towards China regarding their trade surplus with the U.S. Unfortunately proposed tariff and import duties on Chinese imports into the U.S threatens the “FREE” International Trade structure which has bode well for the International Economy most recently.
The ramifications of a ‘trade war’ are certainly a lower U.S Dollar but also the loss of one if not the biggest financier of U.S Debt. However it could harm the standard of living of almost everyone globally. As foreign trading partners match and expand such tariffs, causing trade to possibly slow dramatically causing widespread pain especially to developing countries.
As one can well see the recent developments regarding trade sanctions or penalties have done the U.S Dollar no favors …
Even though a lower U.S Dollar does increase the attractiveness of U.S exporters somewhat.
The use of trend lines, support and resistance lines and parallel lines are simple to use and interpret even though they may look confusing at first glance.
After a period of time the skill becomes an art form and can be used to great effective over any time frame, any market on any chart.
Acting and reacting on the interpretations becomes intuitive again with practice and experience …
