A major gold bull catalyst is unfolding as the US dollar is now in danger of a major break down.
As The Sun Rises: On dollar-watch
July 26 (King World News) – Naveen Nahir at Citi: DXY (US Dollar Index): The dollar posted an evening star at the top of the recent (short-term) trend, post the FOMC decision. We think this could signify a move lower in the index, especially if we see a weekly/monthly close below the prior YTD low of 100.79.
As we had noted a few weeks ago, this would open a path lower towards 98.28 (200-week MA & 55-Month MA) – 98.08 (March 22’ low).
We do caution that the ECB and BoJ meets (Thursday and Friday respectively) are significant event risks.
OTHER TECHNICAL DEVELOPMENTS WORTH NOTING
EURUSD: We prefer to remain cautious on EURUSD ahead of the ECB today. We see support at 1.1021 (July 25th low) and resistance at 1.1276 (July 17th high). We continue to watch the weekly slow stochastics indicator, with triple momentum divergence still looking likely to form. This, if completed, would imply that the trend higher in EURUSD is getting exhausted, as we detailed in CitiFX Techs — Chart of the Day: Caution on EURUSD grows…
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US Dollar vs Yen
USDJPY: We have broken below the 140 handle again. We watch for support at 137.25-137.57 (July 2023 low and 55-week MA).
US Dollar vs Chinese Yuan
USDCNH: We are testing support between 7.1041-7.1228 (Jun 16th and July 14th lows).
King World News note: A major US dollar break down will send the price of gold to new all-time highs and the price of silver well above $30. This will also send the price of the high-quality mining and exploration stocks soaring.
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