Gold/Euro - Cup & Handle (continuation pattern)
Gary Tanashian
January 31, 2010
From a subscriber this morning:
"Hello Gary, as a reader from Germany I appreciate your work a lot because we are a country without precious metals companies, experience and therefore little interest in this complex. I live in the Euro-Zone and therefore I would be very much interested in your view about Gold measured in Euro. Thank you very much in advance, --A"
Well, thank you very much 'A'. Had you not mailed this morning, I would not have taken a look at this compelling picture of gold-euro today. Aside from what I consider to be bullish fundamentals for gold in all major currencies, even as gold takes a much needed breather in USD, it looks technically compelling in Uncle Buck's chief competition in the toilet paper sweepstakes, the euro.
The chart shows a textbook Cup & Handle, complete with the right side high of late November, '09 having exceeded the February, '09 high. I always like to see the right side (most recent) higher then the left (previous high) as this implies momentum and allows for a higher measured target, which in this case would be around 10 if and when the handle breaks consolidation to the upside. I say if because we do not try to predict, but rather show the probabilities. The probabilities, both fundamentally and technically say 'GOLD GOING WELL HIGHER IN EURO'.
Gary Tanashian
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