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Why the US Dollar Is Vulnerable, and What It Means for Gold

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The ‘Dutch Trump’ populist lost his bid to become Prime Minister last week.

This may have elicited strength in the euro and selling in the dolloar.

A daily dollar shows it broke its 50 day line with authority triggering my Expansion pivot sell signal in the process.

In so doing the dollar also triggered a Rule of 4 Sell in snapping a rising 3 point trendline.

The setback in the dollar came despite the Fed’s interest rate hike even as the Fed signaled this was the beginning of a campaign of consistent raise in rates.

The break in the dollar backstopped a surge in the precious metals miners on Wednesday.

GDXJ  ripped 34 to 38 and now shows a 50% retrace toward initial support.

Well-defined support comes in between 35 and 36 where another higher low on the hourlies may be installed on another big backtest… a fractal of the Big Backtest that played out on the dailies last December.

Unless the dollar can recapture its 50 day in short order it is vulnerable to a break to 98 and an Eiffel Tower move — a complete retracement of the post election rally.

An extension lower in the dollar should perpetuate a breakout in gold and the miners over the last swing high.

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