Now that Uncle Buck has done what we thought he might do and bounced from long-term support (see monthly chart at end of post) to the 200 day moving average, a cursory look at the gold “community” shows an increased USD awareness out there among the bugs, especially among the TA bugs. Weren’t they just touting inflation and death of the dollar a few weeks ago?
So here is where Unc stands. This is a good hard test of the SMA 200, which demands respect. The trend is down but a marker is a marker for a reason and the SMA 200 is an important one. Still, this is only considered a test of resistance and the downtrend at this time.
Looking at the weekly multi-panel chart we see USD up into the resistance zone, testing the first resistive moving average. The downtrend is intact vs. other currencies, although the pairs against the commodity currencies (Canada & Australia) may be going bullish.
The monthly chart shows why a bounce (at least) was likely. We had a view on this well ahead of time in NFTRH so as not to be surprised. And so, we aren’t. The bounce has come from long-term lateral support in the index and in the pairs, and that should be respected, overbought daily chart or not.
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