Caution

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Last week we looked at the weekly dollar and discussed how the dollar still had a little wiggle room below the declining weekly trend line. It looks like we should see a resolution this week.

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We are still uncertain if week 15 hosted an early intermediate cycle low. A clear and convincing break above the declining weekly trend line would signal that week 15 was the intermediate low.

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The daily chart does not provide much clarity on the intermediate cycle count. The dollar continues to close below the upper daily cycle band which indicates a daily down trend. Also, the dollar did form a swing high today, potentially setting up a left translated cycle formation.

However gold’s reaction to the dollar forming a swing high warrants caution.

gold

So on a day where the dollar declines we would expect to see some bullish signs for gold. Instead gold delivered four bearish signs.

We see that
* Closed below the upper daily cycle band
* Formed a daily swing high
* Breached the daily cycle trend line
* Formed a bearish TSI Crossover

Unless gold can recover in the overnight, it appears that gold has begun its daily cycle decline.

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