In the October 11 post, The First Domino Has Fallen — Is the Dollar Next?, we raised the possibility that the dollar could become the next domino in a developing market sequence. Since then, the dollar has provided additional evidence that a significant reversal may be developing.
The dollar is in its third intermediate cycle of the current yearly cycle, now at month 9. Its recent encounter with resistance at the declining 200 week MA, followed by a weekly swing high, raises the possibility that the intermediate cycle is beginning to roll over.
The early week 8 high also raises the possibility of a left-translated intermediate cycle.
However, confirmation remains outstanding. A weekly close below the 10 week MA would signal the intermediate cycle decline.
Could Gold Benefit?
A sustained dollar decline could provide a tailwind for gold, but that relationship is not guaranteed. Gold must still establish its own bullish cycle structure.
Our Special Report, “The Dollar and Gold — Is History Preparing to Repeat?”, examines historical dollar/gold relationships and the developing cycle expectations for both markets.
The report is available with a six-week LIKESMONEY trial subscription for $15, including access to our subscriber reports, cycle analysis, and proprietary indicators.
Get the Special Report and Six-Week Trial — $15
The dollar is approaching another important test. The subsequent price behavior will determine whether it becomes the next domino.
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