The dollar stumbled today and gave up most of Friday’s gain.
Monday was day 9 for the dollar’s daily cycle. The bearish reversal came within 3 cents of printing a swing high. A break below 85.72 will form a swing high and deliver a trend line break that will signal a daily cycle decline.
Looking at the weekly chart we can see that the dollar also came close to giving back all of the gains from last week. A break below 85.55 forms a weekly swing high. We can see that the weekly True Strength Indicator has already delivered a bearish crossover, which has been a reliable indicator to mark the weekly cycle peak. With the dollar on week 22, this will likely signal the intermediate cycle decline. Which could be good news for gold.
Gold has been beaten down. My daily cycle count has gold at in an extended decline at day 44. The bullish reversal today has eased the parameters for forming a daily swing low. A break above 1209.90 forms a daily swing low. and quite likely will mark the daily cycle low.
It is week 18 for gold’s daily cycle. Gold has entered its timing band to print an intermediate cycle low. Gold’s timing band does allow for one more failed daily cycle. However, with the dollar rolling over into an intermediate cycle decline I think that we will see gold rally into a new intermediate cycle.