Watching the Dollar

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While the dollar closed higher today, it still appears to be consolidating last weeks rally.

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Tuesday was day 7 for the daily dollar cycle and the dollar could be forming a mini-bull flag.

Meanwhile bonds continued selling off.

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We see that bonds broke below the intermediate trend line which confirms an intermediate decline. With a day 5 peak and and today being day 14, a left translated nature has been assured. There is a good likelihood of breaking below the previous cycle low of 124.27 during this daily cycle decline.

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And with bonds currently on week 11, that leave plenty of time for one more failed, daily cycle to print during this intermediate cycle.

Palladium just may have left behind a daily cycle low on Friday.

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Of course, I would like to see a clear and convincing break but Friday was day 21 for palladiums’s daily cycle and palladium breached the declining cycle trend line. With some follow through and we could label Friday a daily cycle low. And with palladium tending to lead gold, this could be a bullish signal for gold.

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Gold’s daily cycle peaked on day 9 with Tuesday being day 15. Gold will need to print a daily cycle low within the next few days to lock in a right translated nature to this daily cycle. With that in mind it is noteworthy to see that the True Strength Indicator has reached a level that has initiated the three previous daily cycle lows. As usual, we will keep a look out for a swing low to possibly mark the daily cycle low.

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One thought on “Watching the Dollar

  1. Gold bottoming and the USD potentially making a bull flag, isnt that a contradiction?

    I think the USD is topping now, usually at tops theres 3-4 days of whipsawing and consolidation (look at this years cycle tops) tomorrow is day #4 in this range.

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