USD is a foil to the macro party. The US Tweeter-in-chief, global stocks (generally speaking), commodities and resources and during this holiday muted trading season, so too it seems the gold miners, are all taking an anti-USD stance. That stance is otherwise known as the global inflation/reflation trade. There are other dynamics involved, but a key element would be for a sputtering Uncle Buck.
Currently trading futures at 96.75, USD had already eased out of a sharp flag that found resistance at the convergence area of the SMA 50 and SMA 200. Momo indicators are negative. The major daily trend (SMA 200) is up but the intermediate (SMA 50) is turning just a bit suspect.
Thinking ahead (i.e. speculating), if the 50 crosses below the 200 and the media trumpet a DEATH CROSS!!, a hard bounce will probably then follow as usually is the case after a Death Cross and associated hype (or a decline after a Bull Cross going the other way). But such a cross could also work out over time to indicate a trend change from up to down.
Right now, USD’s trend is up, but this test that appears to be failing (caveat: under cover of Santa season – where man is still sleepily content with holiday joy * and the machines are driving the bus) could change that trend. 97 area resistance up to the SMA 200 will remain key.
Taking a wider angle view, what if we party as USD drops here, it death crosses and bounces to screw all those taking that bait in real time, markets correct hard on that bounce, but then Trump gets his way into the election and USD begins a real downtrend or bear market later in the year and it’s stocks and assets of all kinds up up up? Okay, that’s just once scenario that a daily chart cannot answer. But there it is anyway.
* Personally, I cannot tell you the relief that washes over me each year when Christmas and even New Years are finally over. A little disturbing, I know. But it’s true.
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