Why The Recent Gold Rally Could Be Jeopardised : USDX!
It's Long Gold for the moment & I mentioned a break about 2500.21 would be the breakout point!
I already see signs of the Gold rally losing steam. Well, let's call it a short term rally or a retracement rally of something greater.
You see, since about midday Tuesday, so not even 48 hours ago, the USDX has been back-pedalling. I see it as a retrace to it's 38.2 Fib level and then the Gas could go onto the USDX because once something finishes it's Fib retracement it usually follows in its intended direction, the opposite direction to its retrace, the course and trajectory it was previously on, which for the USDX is upwards IMHO. This will bring 'Shorters' into Gold.
So, in summary the USDX as seen on the 4HR chart has retraced to about 50% on the Fib scale, I will be watching closely to see if it moves down further to 38.2%, or even worse for Long gold punters, that it breaks upwards from 50%.
We know from last Friday, the damage it caused when it broke 101.50. In trading, history tends to repeat.
Gold & the USDX do not always follow their Inverse price relationship. But it happens about 80-90% of the time.
Cheers
Chris
* Trading is risky. Please don't rely solely on my financial advice or trade setups.
* Whilst I do my best to bring the most up to date Gold strategy, Gold trading moves very fast and so do it's variables.
See chart.
