Wednesday, 28 February 2018

Euro and Gold Double Tops, USD Double Bottoms

Euro made a double tops, and not surprisingly US Dollar (as measured by DXY) made a double bottoms. And this should be putting pressure on gold and the whole commodities complex in the short term as these double tops/bottoms are playing out.

Eruo double tops, DXY double bottoms, and gold charts
(Click chart to enlarge)

DXY breaks above the downtrend, and the logical place is moving to is in the area of 92 (shown as green horizontal line in DXY chart above), and gold is moving down to test the bottom of the rising purple channel in the chart above. Gold prices may drop below this lower rising trend line to create a trap for both bulls and bears, just for the fun of making traders' lives miserable (so that not everyone would just quit their day jobs and trade full-time. Life isn't meant to be easy. If it's easy, where's the fun in doing it?)

Remember that even when gold tests this bottom rising channel, it's still trending up. But if DXY continues to break above the green horizontal line (92 to 92.50), gold will very likely to break below the rising channel, threatening the uptrend bias. This crossing of this green line signals if this rally in DXY is a dead cat bounce or a reversal.

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