The most interesting aspect to the enclosed comparison charts is the juxtaposition of the Euro/USD with spot gold and silver. Let's notice that the Euro/USD plunged from its mid-August recovery high at 1.4520 to this morning's low at 1.3500, 7% in about 3 weeks, while gold and silver prices -- including the SPDR Gold Shares (GLD) and iShares Silver Trust (SLV) -- remained relatively resistant to the influence of the higher dollar.

Today's new reaction low at 1.3500 in the Euro/USD followed by a recovery to unchanged near 1.3650 could be an initial indication that the current downleg across the May-Sept down-channel is nearing or is at completion, and that a period of recovery is underway.

Barring a decline that breaks 1.3500, the precious metals "head- winds" created by a strengthening dollar just might be about to dissipate. Notwithstanding the direction of the wind, spot gold must hold above $1790 and spot silver above $39.40 to preserve the still bullish patterns.

By Mike Paulenoff

Mike Paulenoff is author of MPTrader.com (www.mptrader.com), a real-time diary of his technical analysis and trading alerts on ETFs covering metals, energy, equity indices, currencies, Treasuries, and specific industries and international regions.

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