Here’s a chart showing the U.S. dollar …
The greenback is testing support at the 61.8% Fibonacci retracement of its bullish move that started in April. This lines up with the 100-day moving average, something used by Chicago traders I know. To be sure, the U.S. dollar is oversold, with MACD the most oversold since October of 2009 – which was the beginning of a big bullish move.
On the bearish side, it could stay oversold for quite some time. Today’s candlestick, which is bearish, is engulfing the previous bullish day’s candlestick.
Now for the good news – the decline in the dollar appears to be sending gold higher. So maybe the recent trend that saw them move together is ending. Wait and see.
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