Wednesday, August 25, 2010 2:10:35 AM
Re: $USD, GOLD - Dollar On Brink Of Rallying ... Or Else, Go GOLD:
As of this EOD (24 AUG 2012) in DAILY chart below, the Dollar index closed at $83.14 after vacillating around its 38.2% Fib level (calculated from bottom of late DEC 2009 = $74.23 to rally top of early JUN 2010 = $88.71).
Today's corresponding RSI at EOD printed 57.57 from a deep rally in early AUG 2010. If RSI showed any weakness over the next several days, one should be concerned about the index inability to complete an EARLY bullish reversal signal, which should be achieved ideally with an RSI topping ABOVE its 66.67 mark. Note that the qualifier and operative word is EARLY reversal signal. Completion would later be achieved with a RSI decline and rally from ABOVE the 40 mark.
While concerns over the European market are lingering (i.e.: weakness in Germany, renewed concerns about Greek banks, today's S&P downgrade of Ireland debt), there are domestic concerns within the US that may cause further risk aversion AWAY from the US Dollar, which may be considered as a diverging event, considering that broad or world market risk aversions have usually sought out safe heaven in the greenback.
In light of such divergence, one should suspect that the ultimate beneficiary might be GOLD.
As mentioned in a earlier post, look for GOLD reaching its $1,300 level if such scenario was to unfold:
$USD (Dollar Index) - 12-Mo., DAILY Chart:
$GOLD - 20-Yr., MONTHLY Chart:
- Dalcindo
As of this EOD (24 AUG 2012) in DAILY chart below, the Dollar index closed at $83.14 after vacillating around its 38.2% Fib level (calculated from bottom of late DEC 2009 = $74.23 to rally top of early JUN 2010 = $88.71).
Today's corresponding RSI at EOD printed 57.57 from a deep rally in early AUG 2010. If RSI showed any weakness over the next several days, one should be concerned about the index inability to complete an EARLY bullish reversal signal, which should be achieved ideally with an RSI topping ABOVE its 66.67 mark. Note that the qualifier and operative word is EARLY reversal signal. Completion would later be achieved with a RSI decline and rally from ABOVE the 40 mark.
While concerns over the European market are lingering (i.e.: weakness in Germany, renewed concerns about Greek banks, today's S&P downgrade of Ireland debt), there are domestic concerns within the US that may cause further risk aversion AWAY from the US Dollar, which may be considered as a diverging event, considering that broad or world market risk aversions have usually sought out safe heaven in the greenback.
In light of such divergence, one should suspect that the ultimate beneficiary might be GOLD.
As mentioned in a earlier post, look for GOLD reaching its $1,300 level if such scenario was to unfold:
$USD (Dollar Index) - 12-Mo., DAILY Chart:
$GOLD - 20-Yr., MONTHLY Chart:
- Dalcindo
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