Bearish Outside Day in Gold, With the Dollar Oversold
Precious metals have flown higher over the last month as the market woke up to the Federal Reserve’s uber-dovish policies and this country’s lag in the fight against coronavirus.
However the U.S. economic data has shown some signs of improvement and now gold is showing a potential reversal pattern.
XAUUSD touched a new all-time high of $2,075.28 today. It then dropped as low as $2,023 and remains down more than 1 percent. That’s a bearish outside day.
Such a candlestick is a potential reversal pattern when it follows the blistering run we’ve seen in gold.
It also comes at a time when the
DXY
is oversold, with its stochastic weekly chart at the lowest level in 2-1/2 years.
The other chart worth viewing is the Center for Disease Control’s case count for coronavirus, which has trended lower for the last two weeks.
Looking at the bigger picture, there are probably many reasons to like precious metals over the long run and to fade the dollar. However the move may have reached an extreme at this point. That may weigh on gold – and
XAGUSD
– in coming weeks.
However the U.S. economic data has shown some signs of improvement and now gold is showing a potential reversal pattern.
XAUUSD touched a new all-time high of $2,075.28 today. It then dropped as low as $2,023 and remains down more than 1 percent. That’s a bearish outside day.
Such a candlestick is a potential reversal pattern when it follows the blistering run we’ve seen in gold.
It also comes at a time when the
DXY
is oversold, with its stochastic weekly chart at the lowest level in 2-1/2 years. The other chart worth viewing is the Center for Disease Control’s case count for coronavirus, which has trended lower for the last two weeks.
Looking at the bigger picture, there are probably many reasons to like precious metals over the long run and to fade the dollar. However the move may have reached an extreme at this point. That may weigh on gold – and
XAGUSD
– in coming weeks.