IvanLabrie

DXY: Neutral until the dam breaks...

TVC:DXY   U.S. Dollar Currency Index
The end of the 90s dollar rally could have been anticipated by anyone using Time@Mode techniques to read the charts.
Back then, the last active trend signal in the quarterly timeframe had expired right at the very top of the move, before prices moved lower until 2008. A similar trend can occur in the not so distant future, since the bullish trends are over, but we still don't have a confirmed down trend signal either.

A key price level is the 91.83 zone, what I'd call a Maginot line...If, and when, the dollar index moves below this level, price can swiftly move lower for a long time. Until that happens, choppy market action is more probable than a steady down trend.
There's no active uptrend currently, so the path of least resistance is sideways until support breaks.
For it to break, a major macro and geopolitical catalyst must occur, otherwise, we can expect the status quo to hold.

The accumulation of gold reserves by many countries is an interesting fact, the push by Facebook to launch an SDR like stable-coin, backed by reserves of multiple foreign currencies, which apparently has some ideological backing by the IMF and other entities, is also noteworthy.
In this no growth enviroment, trends aren't likely to trigger easily, we should monitor the emerging markets, China, Brazil, and Argentina come to mind. Argentina and Brazil are on the brink of possible labor reforms, that could spark growth, from the depths of hell where their economies sit.
Until a very evident catalyst occurs, we won't have an easy to trade trend in the Forex market. So, don't be in a rush to jump into any FX, gold , or commodities positions yet. These factors I mention are of long term nature, over time, things will become clearer and we will have the chance of trading when odds and risk/reward favor doing it.

I've decided to watch for long entries in Gold , but we need a correction in it to enter longs again. Currently, it's quite probable to see the stock market break the ATH and go higher for a while, before any sizeable correction can occur, sentiment just doesn't favor any other direction. Gold sentiment and charts indicate we will retrace once again, after hitting the 1358 resistance from the daily high of the Brexit day.
Either short gold , long stocks or wait in cash until we can buy Gold again, way lower. If it were to fall below 1246, then the quarterly trend in it failed -once again-. Unless that happens, any sizeable dip will lead to a rally once more.


Best of luck to us all,
Cheers.

Ivan Labrie.
Comment:

As hedge funds bet massively on gold surging further, but price was rejected from resistance, I think it will retrace from here once again.
Comment: Every time commercial futures traders went net short with 200k+ contracts, and hedge funds long with 200k+ contracts, Gold prices correct soon after. I would wait for futures positioning to shift radically to go long again. Wait for commercials to get close to flat on their short positions...patience.
Nice charts and sensible comments.
Reply
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