Dollar double bottom — gold tests support

Apologies for my recent absence. I seem to take longer to recover from a ‘flu virus than I used to. The Dollar Index, however, has made a robust recovery, breaking resistance at 98.50. Completion of a double-bottom suggests a new advance with a target of 104*.

Dollar Index

* Target calculation: 100 + ( 100 – 96 ) = 104

Gold retreated below its former primary support level of $1200/ounce as the dollar strengthened. Breach of the rising trendline suggests the bear rally is over; follow-through below $1180 would confirm, strengthening the long-term target of $1000/ounce*.

Spot Gold

* Target calculation: 1200 – ( 1400 – 1200 ) = 1000

3 thoughts on “Dollar double bottom — gold tests support

  1. […] Dollar double bottom — gold tests support […]

  2. Jay Towner says:

    Remember the golden rule of the ugly dog competition..you don’t get to see how truely ugly it is until it turns around!

  3. Vic Russo says:

    Looks like currencies are in an ugly dog competition. With the FED expected to hold off raising rates due to the slowdown in the economy, the dollar increases given the still poorer prognosis in Europe and Japan with their announced QE programs. Evidently the dollar looks attractive when compared to other currencies.

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