Gold’s Bullish Reaction

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The dollar broke decidedly lower on Tuesday.

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The dollar’s daily cycle peaked on day 33, formed a swing high the following day, and then lost the 10 day MA on Friday. Tuesday the dollar was firmly rejected by the 10 day moving average and closed below the upper daily cycle band to signal the daily cycle decline. The dollar should break below the daily cycle trend line before completing its daily cycle decline.

And gold reacted bullishly to the dollar breaking lower.

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Gold printed its lowest point on 10/07, following the previous daily cycle peak. Gold had since been crawling along both the 10 day MA and the 200 day MA. The dollar breaking lower on Tuesday helped gold to close decisively above both the 10 day MA and the 200 day MA, printing a new daily cycle high. A new high on day 17 virtually assures us of a right translated daily cycle formation. A right translated daily cycle formation would help confirm that the intermediate cycle low was left behind as well.

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Gold printed its lowest point on week 18 following the week 5 peak. Gold needs to form a weekly swing low to help confirm a new intermediate cycle. Gold managed to close above the 200 week MA last week and has a full weekly candle above it this week. This shifts the possibility towards week 18 hosting the intermediate cycle low.

The Miners are closer to confirming that a new intermediate cycle has begun.

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The Miners printed their lowest point on week 20 and formed a weekly swing low the following week. The Miners also have already regained the 200 week MA and they are closing in on the declining weekly trend line. A clear and convincing break above the declining weekly trend line will confirm the new intermediate cycle for the Miners.


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