CycleTrading: Gold Resilience
|Gold demonstrated resilience in the face of Tuesday's dollar rally.
The dollar broke lower on Tuesday but then found support at the 50 day MA and closed higher on the day. Tuesday was day 29 for the dollar's daily cycle, placing it in its timing band for a daily cycle low. The dollar did break below the daily cycle trend line on Tuesday. So it is possible that the support from the 50 day MA can trigger a daily cycle low. But gold maybe sniffing out an intermediate dollar decline.
Gold broke out to a new daily cycle high on Tuesday. The status of the daily gold cycle may not be clear, but gold is clearly in a daily uptrend. If gold is in fact on day 25, then a dollar rally could send gold into a daily cycle decline. However, if the dollar has begun its intermediate cycle decline, then the new dollar cycle should left translate and fail, which would send gold up on its next left higher.
We discussed on Monday that he dollar has already formed a weekly swing high this week. If Tuesday marks the daily cycle low we should know in 5 to 8 days if the new dollar cycle will left translate and continue the intermediate cycle decline.
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