Potential For Corrective Pullback Bottom Seen.
GOLD (Futures): Although a negative weekly close was recorded the past week, three days of upside gains saw the commodity gain strength between Wednesday and Friday closing the week with another rejection candle. This rejection of lower level prices now suggests bottom forming process and with the mentioned upside gains ,a follow through higher should ensue opening the door for a move towards its Mar 02’09 high at 959.50 with a penetration and negation of there setting Gold up for a retarget of its 2008/2009 highs at 1,007/11.Daily studies have turned higher suggestive of further upside gains though those of the weekly are still pointing lower. However, if our upside view fails to play out and Gold snaps below the 922 level, its Mar 10’09 low, resumption of its declines started at the 1,007 level will be activated towards its weekly EMA currently at 861.44 and possibly lower. On the whole, while consolidation to bottoming process is in force and Gold remains within its daily and weekly rising channels, the commodity is biased to the upside in the short term with a likely resumption of its upmove started at the 871 level envisaged.
Weekly Chart: GOLD
Turns Higher Ahead Of The 305.50 Level.
CORN(Futures): It looks like a return back towards the 429 level, marking the commodity’s Feb 06’09 level is now shaping up. This is coming on the back of a halt in price ahead of the 305.50 level, its 2008 swing low following Corn’s declines off the 429 level. With a third week of consecutive upside gains seen, further upside risk towards the 429 level is now likely and if a break and hold above there occurs, we could see additional price incursions towards its Feb/June’07 highs at 436/7.Its weekly studies are bullish and trending higher which suggests further strength. To the downside, corrective pullbacks if triggered should push the commodity towards the 383 level, its Feb 09’09 high with a turn below there calling for more downside targeting the 342 level ,its Feb 20’09 low. While we think the latter level(strong support) should turn the pair back up, snapping below there will expose the 305.50 Level. On the whole, with a temporary bottom now in place, a decisive cut through the 429 level is required to target further higher prices.
Weekly Chart: Corn
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