Daily Charting the Dollar Breakdown and Gold Bullish Breakout

Aug 28, 2017: 1:20 PM CST

Let’s expand the perspective on today’s “Dollar Drop and Gold Breakout.

The two charts below compare the divergent Daily Trends of the Dollar and Gold:

Gold Breakout

Gold surged in early 2017 off the $1,150 price pivot quickly toward the $1,300 target.

From there, an $80 sideways trading range developed, allowing us to play “ping-pong” trades between these support and resistance levels.

Instead of falling down a third time from our target, Gold buyers triggered a breakout this morning, initiating a “short-squeeze” with bullish activity.

The picture is the exact opposite in the US Dollar Index:

Dollar Breakout

We see “Angles of Descent” follow the price lower.  Note how the downtrend accelerated through 2017.

Odds seemed to favor a bounce up away from the 92.50 target but that didn’t materialize today, and Friday gave us a good clue (with the strong sell day) that sellers had the strength to shatter this proposed support level.

Now the index trades beneath support at a fresh new 52-week low.

Unless these two events are one-day traps, look for these trends to continue with breakout events.

Come join us to learn these tactics (beyond this simple/quick update) and have an evening game plan you can use effectively for the next trading day.

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Corey Rosenbloom, CMT

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