{"id":115277,"date":"2017-10-23T14:55:30","date_gmt":"2017-10-23T18:55:30","guid":{"rendered":"http:\/\/countingpips.com\/?p=115277"},"modified":"2018-06-01T15:55:28","modified_gmt":"2018-06-01T15:55:28","slug":"dollar-getting-ready-to-rally","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/10\/dollar-getting-ready-to-rally\/","title":{"rendered":"Dollar Getting Ready to Rally"},"content":{"rendered":"
October 23, 2017<\/div>
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By The Gold Report<\/b><\/p>\n

Source: Clive Maund for Streetwise Reports<\/em> \u00a0\u00a010\/22\/2017<\/a><\/b><\/p>\n

Technical analyst Clive Maund discusses the outlook for the U.S. dollar and its implications for gold.<\/p>\n

The dollar is getting ready for a sizable rally, and that means that
\ngold and silver are going to be knocked back again. Longer term however,
\nthe outlook for the Precious Metals could scarcely be better, as we
\nwill see.<\/p>\n

In last weekend’s update<\/a> it was pointed out that gold’s gap breakout
\nfrom its steep downtrend shown on its latest 6-month chart below was
\nprobably false and that it was expected to drop back as the dollar
\nadvanced, which it duly did last week. Bearing in mind that the dollar
\nhas about completed its Head-and-Shoulders bottom, it is now clear that a
\nparallel Head-and-Shoulders top is completing in gold as shown on the
\nchart. This chart projects a breakdown beneath the nearby support level
\nto be followed by a drop targeting the quite strong support in the $1200\u0096$1215 area.<\/p>\n

<\/center>Gold\u0092s latest COT chart still looks more bearish than bullish, with a
\nlot of room for improvement, such as would be occasioned by a drop to
\nthe $1200\u0096$1215 area.<\/p>\n

<\/a><\/center>Click on chart to popup a larger, clearer version.<\/p>\n

On gold’s 8-year chart it continues to look like it is in the late
\nstages of a giant Head-and-Shoulders bottom pattern. The buildup in
\nvolume over the past 20 months certainly looks positive, especially over
\nthe past several months, all the more so because it has driven volume
\nindicators higher, notably the Accum-Distrib line, which is not far off
\nmaking new highs\u0097exceeding its level at the 2011 peak. Once gold
\nbreaks above the resistance level approaching $1400 it will be on its
\nway, although it will then have to contend with another important band
\nof resistance in the $1510\u0096$1560 range. A near-term retreat by gold to
\nthe $1200\u0096$1215 area in the face of a dollar rally will not damage
\nthis long-term technical picture.<\/p>

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<\/center>
\nThe Market Vectors Gold Miners, GDX, which functions as a gold stocks
\nindex, is marking out a giant Head-and-Shoulders bottom that roughly
\nparallels the one completing in gold itself. A near-term decline to $20-$21 in GDX will be viewed as presenting another important buying
\nopportunity for the sector. The volume pattern during the build out of
\nthis base pattern is very bullish, with big volume on the rise out of
\nthe low (Head) of the pattern, tailing off steadily as the Right
\nShoulder has formed.<\/p>\n

<\/center>
\nThe latest 6-month chart for GDX shows an upsloping Head-and-Shoulders
\ntop completing which parallels the one completing in gold itself. This
\npattern targets strong support in the $20-$21 area following the
\nexpected breakdown.<\/p>\n

<\/center>
\nOver the past several weeks the dollar has behaved exactly as predicted
\nin recent updates, as it has dropped back to complete the Right Shoulder
\nof its Head-and-Shoulders bottom, and last week started to advance
\ntowards the upper boundary or “neckline” of the pattern in readiness for
\nthe upside breakout and advance. This Head-and-Shoulder bottom targets
\nthe 97 area as shown, near to the falling 200-day moving average\u0085<\/p>\n

<\/center>
\nOur prediction made many weeks ago that the dollar would rally off the
\nlower boundary of its big bullhorn pattern shown on the 4-year chart
\nbelow to break out above its restraining Dome has proven to be correct,
\nand a projection has been drawn on this chart showing roughly what is
\nexpected to happen. As we saw above on the 8-month chart, the base
\npattern now approaching completion targets the 97 area approx. This is
\nthe “swansong rally”\u0097the dollar’s last rally before it “hands in its
\ndinner pail,” and should present a wonderful last opportunity to
\naccumulate the better gold and silver stocks, before the dollar does an
\nabout face, and breaks down from the large Broadening Top pattern into a
\nsevere decline.<\/p>\n

<\/center>
\nThe Hedgers chart has been warning for weeks that the dollar will
\nreverse and rally, as has been pointed out repeatedly. The latest chart
\nshows that the rally is still ahead of us\u0097which is congruent with the
\ndollar having completed a valid Head-and-Shoulders bottom.<\/p>\n

<\/a><\/center>Click on chart to popup a larger, clearer version.<\/p>\n

Chart courtesy of www.sentimentrader.com<\/i><\/p>\n

Finally, it is a matter of conjecture what will drive a dollar rally
\nover the medium-term, but one possibility is an escalation of the
\nCatalonia crisis, with the Madrid government attempting fascist style
\nrepression of the Catalonian’s drive for independence leading to
\nconflict. Both Madrid and the European Union have an interest in
\ncrushing the Catalonians, since both profit from centralization of
\npower. Thus to whatever extent the Catalonians are successful, it will
\ninspire other would be breakaway regions across Europe, further
\nundermining the European Union and thus putting pressure on the euro,
\nhence a dollar index rally, as the dollar index is made up approximately
\n57% of the euro.<\/p>\n

Clive Maund<\/i><\/a> has been president of www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years’ experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.<\/p>\n

Want to read more Gold Report<\/i> articles like this? Sign up at www.streetwisereports.com\/get-news<\/a> for our free e-newsletter, and you’ll learn when new articles have been published. To see recent articles with industry analysts and commentators, visit our Streetwise Interviews<\/a> page.<\/p>\n

Disclosure:<\/b>
\n1) Clive Maund: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies referred to in this article: None. I determined which companies would be included in this article based on my research and understanding of the sector.
\n2) The following companies mentioned in this article are sponsors of Streetwise Reports: None. Streetwise Reports does not accept stock in exchange for its services. Click here<\/a> for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
\n3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer<\/a>. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
\n5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and\/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.<\/p>\n

Charts provided by the author.<\/p>\n

\"\"<\/p>\n","protected":false},"excerpt":{"rendered":"

By The Gold Report Source: Clive Maund for Streetwise Reports \u00a0\u00a010\/22\/2017 Technical analyst Clive Maund discusses the outlook for the U.S. dollar and its implications for gold. The dollar is getting ready for a sizable rally, and that means that gold and silver are going to be knocked back again. Longer term however, the outlook […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-115277","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/115277","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=115277"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/115277\/revisions"}],"predecessor-version":[{"id":115280,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/115277\/revisions\/115280"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=115277"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=115277"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=115277"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}