DOLLAR (Update)

We got a bearish engulfing pattern on 5/19 in an area of stiff resistance.  We have seen some follow through selling the next two days.  Friday saw a close below the 20 DMA.  We have an upward sloping trendline and the 50 DMA coming up to offer some support.  We are currently at a crossroads in this market.  Will we retest the recent highs or continue lower.  I wouldn't be surprised to see a retest at some point, but the last 3 days has seen strong selling.  The 78.60% retracement zone will probably need to be tested before any significant downward moves are made.  We can also look for some potential areas to get long on this pullback.

Possible support zones:
Zone 1:  85.25-85.40  current zone
Zone 2:  84.60-84.80
Zone 3:  83.80-84.05
Zone 4:  82.75-83.00

GOLD (Update)

Gold has sold off strong from that resistance zone I mentioned a couple weeks back.  I didnt' think it would come off as hard, but I still like Gold to move higher.  It found some buyers on Friday in a fib cluster support zone combined with a 50 DMA.  Let's see if you get some follow through buying in the next couple days.  The next solid support zone is around 1144-1150.  I don't expect Gold to move below this area with another attempt higher. 

SUGAR (Update)

Friday's price action saw the 15.50 level taken out.  This was the last swing high on the most recent move down and signals a reversal in trend direction.  We now have stopped making lower lows and lower highs.  The key will be if it can continue higher.  The next major hurdle to break is 17.85.  However, there will be stiff resistance on the way to this swing high. 

Let's analyze the recent move up off the 13.00 low.  It has made two major retracements seen on a 120M chart.  The first one was medium deep and the second was very deep.  Both had right hand skew breakouts.  This gives us conflicting signals.  The deep retracements signals a weak up move, but the right handed skewing signals strong upside momentum.  Given the major weakness over the past few months it doesn't surprise me to see these deep retracements as it seems to keep trying to shake off the weak bulls.

Let's look at some potential resistance zones to take profits on longs or get short if you feel another move lower:
Zone 1  15.90-16.05 could get a minor correction
Zone 2  16.25-16.35 (not to exceed 16.50); could get a nice correction
Zone 3  16.66-16.75 (not to exceed 16.90); could get a nice correction

Sugar (Update)

In my last post for Sugar I wrote "If 15.50 can get taken out, then you will stop the lower highs, lower lows that have been seen on this most recent down move. This would give some confirmation that a short term bottom is in place."  The low of 13.00 has continued to hold since May 7th and today we closed at 14.93.  The next upside target is 15.50.  If we can take this high out, then we may make a run at 16.80.  This is the 78.60 retracement level from last swing high.  This should offer up some stiff resistance.

DOLLAR

We had a shooting star pattern form on Monday, but got no confirmation on Tuesday.  Well today we got an engulfing pattern in the same resistance zone as the shooting star formed.  RSI was extremely overbought and just crossed back below this zone.  MACD shows slowing momentum.  The bullish nature of this rally may cause this market to dance sideways in a choppy manner before going lower.  At any rate, you are finally getting some bearish signals.  Let's see if we get some follow through selling tomorrow.  I would sell below 86.045 with a stop above 87.625.

DOLLAR (UPDATE)

We couldn't get downside confirmation today on yesterday's shooting star pattern.  This pattern is off the table.

GOLD (update)

Gold is still retracing from that resistance zone I mentioned a few days back.  I expect Gold to continue to move sideways and down a bit before moving back higher.  I will be looking for areas to buy on this pullback, but have no target zones currently.