Currency market: Gold vs DXY
London (Apr 26) Recall the last Gold trade posted in February, short 1815.65 to target 1728.91 for 80 + points. Gold then languished for 2 weeks at the bottom of its 1642.17.
February Gold range 1815.65 to 1642.17 or 173 points. Today, 1846.05 to 1693.27 or 152 pips and a 21 point range compression. Most vital for higher / lower is 1769.67.
1846.05 is the top average among 10 years of monthly averages. All remaining averages are lower which means the trade strategy is short. Above 1846.05 targets 1870.01 and Max at 1937.62.
Below 1693.27 targets 1572.54, 1524.19 and the 5 year average at 1484.48. Caution at the 5 year average as Gold is replete with many averages and a brick wall of averages at 1.1400's.
Gold and the S&P's trade above 5 year averages while DXY trades below at 95.53. Explains DXY Vs Gold negative Correlations from monthly averages to 10 years. Gold is misplaced and should trade alongside DXY with positive Correlations. DXY must break above 95.53 or Gold must trade below 1484.48.
The proper alignment is S&P's above 5 year averages and DXY and GOLD below. Or S&P's below 5 year averages and DXY and GOLD above. Gold is the problem and completely misplaced.
Negative Correlations means DXY longs and Gold short or Gold longs and DXY shorts as proper trade arrangement.
DXY
Bottom for February 89.95. Today, 90.24 or a 39 pip rise. From 94.00's and 95.00 are many averages and a brick wall of averages and the same from February. DXY in February rose from 89.95 to 93.40's then dropped to current lows at 90.70. DXY price is low and oversold and a buy drop trade strategy.
Higher DXY must break 91.57, 92.89, 93.70, and 94.55. Below 90.24 then next comes 89.80, 89.75 and 88.06.
DXY from current 90.80 and GOLD 1776.95 offer a trading range from 1731.55 to 1822.35.
USD/CHF 0.9157 offers next breaks at 1777.86 and 1776.03. USD/CHF trades above DXY. USD/CHF also offers 1731.17 and 1822.73.
Gold daily trade range is 18 points. Supports and resistance are located at barely 4.5 points.
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