Today top Citi analyst Tom Fitzpatrick told King World News that the US dollar is now in danger of tumbling much lower. Of course gold bulls have been waiting for the US dollar to give way and ignite a rally in the gold market.
Trouble For The US Dollar
May 10 (King World News) – Top Citi analyst Tom Fitzpatrick: The US Dollar Index has failed to see any momentum follow through in recent weeks and as a result one of our favorite warning indicators is close to completing.
Triple momentum divergence on the weekly chart (High followed by higher high followed by higher high in price accompanied by lower and lower high in momentum) looks almost certain to complete its crossover at the close today (see divergences on chart below).
Divergences Spell Serious Trouble For US Dollar
Only a late in the week US dollar rally will prevent this.
Prelude To A 7% Tumble?
This present setup is very similar to that seen in July 2013 before the US Dollar Index fell high to low nearly 7% and the euro rallied nearly 10%.
A move towards 93.80 on the US Dollar Index would be the minimum you would likely expect with this development with a possible extension towards the trend line support around 91.10. That would equate to a high to low move of around 5-7%.
King World News note: A serious decline in the US dollar will ignite the gold market at a time when investors and traders least expect it. Also, within hours
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