Interesting things are wvolving in the currency markets and gold.
First of all let's start the currencies because I think this is going to drive gold's next cycle.
EURUSD
The last 2 intermediate cycle lasted for 120 and 100 candles and this one is already 126 candles long. After Friday's big reversal into the close - we also tagged the target price counted from the descending triangle - the chance is pretty high that the EURO printed a panic selling and completed its ICL . The first few months of this year was a long consolidation which ended in a descending triangle . The triangle broke down and we had a waterfall. Notice how RSI and TSI (usually it's giving an early signal) reversing.
In the meanwhile DXY printed a bear market rally.It just tested back a multi month resistance at 93. The bear market rallies usually ending up in a panic buying when the permabulls are panicking out they are missing the next rally in the mentioned vehicle. Easy come easy go: these kind of rallies are turning back down very soon.
I was waiting for a panic selling in gold too. We broke down from the range but it seems gold is printing less and less shallow ICLs. This time a break down from the multi month consolidation was not even close to the EurUsd panic selling.
Gold resisted the strong dollar
This means strength and accumulation to me. Big players are preparing for a big up move in the following months. If the dollar starts to drop again gold will rocket fly.
I like the RSI picture here. We completed the overbought zigzag what I like to see at the end of ICLs. RSI also leaving the oversold territory.
As we completed a swing on Thursday and Friday we had a follow through I think the daily cycle low is in and maybe the ICL as well.
If this was an ICL the next 5-10 days I would like to see a very powerful rally that breaks out from the range with the dropping dollar.
If it's a DCL only and we have one more daily cycle with and ICL ahead of us the next few days of rally will be week and we might not even reach the top of the range.
My bet is on the breakout to the upside from the range. Time will tell...
First of all let's start the currencies because I think this is going to drive gold's next cycle.
EURUSD
The last 2 intermediate cycle lasted for 120 and 100 candles and this one is already 126 candles long. After Friday's big reversal into the close - we also tagged the target price counted from the descending triangle - the chance is pretty high that the EURO printed a panic selling and completed its ICL . The first few months of this year was a long consolidation which ended in a descending triangle . The triangle broke down and we had a waterfall. Notice how RSI and TSI (usually it's giving an early signal) reversing.
In the meanwhile DXY printed a bear market rally.It just tested back a multi month resistance at 93. The bear market rallies usually ending up in a panic buying when the permabulls are panicking out they are missing the next rally in the mentioned vehicle. Easy come easy go: these kind of rallies are turning back down very soon.
I was waiting for a panic selling in gold too. We broke down from the range but it seems gold is printing less and less shallow ICLs. This time a break down from the multi month consolidation was not even close to the EurUsd panic selling.
Gold resisted the strong dollar
This means strength and accumulation to me. Big players are preparing for a big up move in the following months. If the dollar starts to drop again gold will rocket fly.
I like the RSI picture here. We completed the overbought zigzag what I like to see at the end of ICLs. RSI also leaving the oversold territory.
As we completed a swing on Thursday and Friday we had a follow through I think the daily cycle low is in and maybe the ICL as well.
If this was an ICL the next 5-10 days I would like to see a very powerful rally that breaks out from the range with the dropping dollar.
If it's a DCL only and we have one more daily cycle with and ICL ahead of us the next few days of rally will be week and we might not even reach the top of the range.
My bet is on the breakout to the upside from the range. Time will tell...
Comment:
If we close in the green and the dollar reverses the launch code for the rally accepted.
Trade closed manually:
It seems we will drop below 1300.
I will watch it without position.
I will watch it without position.
But after the Europen markets close now I just see a good entry for smartmoney who missed the exact bottom.
The whole drop is bought.