Tuesday's weakness in the dollar caused a bullish reaction with gold.
Tuesday was day 12 for the daily gold cycle and gold broke out to a new daily cycle high. While gold is not out of the woods yet from the possibility of printing a failed daily cycle, a dollar declining into a long awaited daily cycle decline should help to lift gold higher. A new daily cycle high for gold on day 12, or thereafter, begins to shift the odds towards a right translated daily cycle formation.
The dollar printed an exhaustion candle on Tuesday, which was day 33 for the dollar's daily cycle. The dollar has been rallying since late August. Tuesday's exhaustion candle eases the parameters for forming a daily swing high. A break below 98.58 forms a daily swing high. And since the dollar is late in its timing band for a daily cycle low, any swing high now has good odds of sending the dollar into its daily cycle decline. With the dollar's daily cycle trend line is over 2 points lower we can use a close below the 10 day MA as our signal of the daily cycle decline.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
EUR/USD drops below 1.0800 after German Retail Sales data
EUR/USD has come under fresh selling pressure and trades below 1.0800 after the data from Germany showed that Retail Sales declined by 1.9% MoM in February. Resurgent US Dollar demand is adding to the downside in the pair. US data are next in focus.
GBP/USD stays weak near 1.2600 amid market caution
GBP/USD remains defensive near 1.2600 in European trading on Thursday. The hawkish tone from Fed Governor Christopher Waller keeps the US Dollar afloat amid a cautious trading environment ahead of key US data releases and the Good Friday trading lull.
Gold price holds strength ahead of US core PCE inflation
Gold price holds onto gains near $2,200 in Thursday’s European session. The precious metal exhibits firm footing ahead of the United States core PCE Price Index data for February, which will be published on Friday.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.