Purely from a technical perspective, let's notice that the Euro/US Dollar hit a one-week high this morning at 1.2985 off its low at 1.2620 (+2.85%). It has since corrected and turned up from 1.2890, which happens to be the recent upside breakout plateau of a two-week base-like formation that projects to 1.3080-1.3120.

So far, the fact that the Euro/USD preserved support at its prior upside breakout area is a very constructive sign of higher prices ahead, after the current rest-digestion period runs its course in the upcoming hours.

Spot gold, too, and the SPDR Gold Shares (GLD) continue to act extremely strong. Let's notice that the series of higher-lows off its December 29 corrective low at $1522.48 remains intact and now has Euro/USD moving in relative tandem, which is a supportive factor.

My near-term work in spot gold suggests strongly that a sustained climb above $1670.50 should trigger a run at $1700 immediately thereafter.

 

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.