Daily Charting the Dollar Breakdown and Gold Bullish Breakout
Mon, Aug 28, 2:31 PM ET, by Corey Rosenbloom
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 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:
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.
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Corey Rosenbloom, CMT
Afraid to Trade.com
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Corey's book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).”
SDI Glossary: "Breakout" Definition
SDI Glossary: "price" Definition
SDI Glossary: "Finance" Definition
SDI Glossary: "Stock" Definition
SDI Glossary: "Trend" Definition
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