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Currency market: US Dollar Index, gold, S&P 500

DXY trades below its 5-year average at 95.00 and many and massive resistance exists at 94.00's. Gold trades above the 5-year average at 1400.00's. DXY and Gold are severely mis positoned as both are the same asset and should trade in tandem above or below 5-year averages.

The S&P's trade above its 5-year average at 2722.43. The S&P's and Gold trade above 5-year averages while DXY trades below. Gold broke above the 5 year average March 2019 while the S&P's traded above the 5 year average January 2020. DXY broke below vital 5 year average January 2020 at the same time the S&P's traded above.

Gold is off kilter to DXY and the S&P's and proper to alignment is Gold must trade below the 5 year average to match its counterpart DXY or DXY must trade above 95.00's. DXY above 95.00 then means the S&P's must trade below the 5 year average at 2700's.
If Gold breaks below 1400's and DXY trades below 95.00's then the system is aligned as the S&P's trade in its proper position above the 5 year average.

The result to Gold's misalignment is lack of trade range. Gold's total daily trade range is 9 pips or to be perfectly exact 8.88 points for a total of 17.76 points.

Gold

As day trades are designed for multiple longs and shorts, here's today's set ups.

Long 1765.31 to target 1774.19. . Short 1783.07 to target 1778.63.

DXY

Long 92.75 and 92.80 to target 92.98. Short 93.79 and 93.74 to target 93.56.

USD/CHF at 0.9228 remains slight overbought as the week began deeply overbought.

S&P 500

Long 4332.41 and 4337.85 to target 4343.30. Short 4375.97 and 4370.52 to target 4365.08.

Any price below or above stated long and short entries are free money points. 

Author

Brian Twomey

Brian Twomey

Brian's Investment

Brian Twomey is an independent trader and a prolific writer on trading, having authored over sixty articles in Technical Analysis of Stocks & Commodities and Investopedia.

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