Gold and Miners' (bottom) Vs. USD's (Top)?
Let's start with the USD:
- Its weekly Head & Shoulder (H&S) pattern seems to be invalidated at first sight. However, i beg to differ and believe that the pattern still holds in a complex H&S form where multiple heads & shoulders are developing here.
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Looking at DXY's monthly chart from Fibonacci Fan's perspective, the strength of USD is still pretty much constrained by its 61.8% Fibonacci level. In fact, DXY could rise to about 84 and still be confined by the 61.8% Fibo.
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Indeed, the monthly chart justifies the view that the weekly H&S formation remains intact.
- On USDOLLAR index weekly chart, it is about to hit the upper channel resistance any time now with a stretched overbought level, i.e expecting a correction from thereon.
- Again, looking at Euro-USD pair, the "reversed H&S" looks solidly intact and the recent correction back to the neck-line looks about to finish soon.
Conclusion on USD
We are about to see its strength to stall with a reversal soon.
On to Gold:
- Gold price continues to chop around its 61.8% Fibonacci Fan level with a mean to test higher level closer to 1,600 level.
- In any case, the "reversed H&S" of gold may prove to be what it needs to stage a recovery soon.
On Miners:
- The counter rally witnessed yesterday right at its multi-year channel support and 61.8% Fibonacci level from 2008's trough to 2011's peak was not unexpected as I mentioned here
- Indeed, if this bull were to survive, we need to see strong counter rally to prevail from hereon.
- Again, Miners are expected to similarly carving its own "reversed H&S" for a strong recovery, if the bull were to survive indeed.
- As seen in GDX, could last night's strong rally be termed as a classical "1-day reversal"?
Conclusion on Gold & Miners
With the expectation of a stalling USD, we may finally expect a real bottom soon in both Gold & Miners. Stay tuned!
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Author: William Yii
William Yii
AlphaOmegaHedge
Alphaomegahedge is a financial blog that attempts to use the powerful tools of technical analysis plus the big picture of some important fundamental views in identifying major & intermediate trends of risky assets. My main focus are precious metals & miners, U.S major indices & Malaysia Equities.
Author is an equities fund manger who is currently based in Malaysia.
Rightly or wrongly, the views expressed on this blog are of author's personal opinion and shall neither serve as investment advice nor recommendation under any circumstances. All views are meant for educational purposes only.
Copyright © 2013 William Yii
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