Slope of Hope Blog Posts
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The dollar (viewed from its cash index, the DXY) continues to climb, and in fact has exceeded its prior high of 78.45 from January 12, which is a very positive near-term technical "event" for the greenback. After all, the idea that the DXY could rally, pull back, and then rally again to a higher-high in the aftermath of a powerful downtrend was unthinkable to most fundamentalists.
Now, however, with the Scott Brown victory in Massachusetts, a possible refocus on fiscal priorities by the Democrats, and trouble brewing in Greece, all of sudden, perhaps, there are underlying reasons to move into dollars? Be that as it may, my work argues that the DXY is heading for 80.00, and then 82.00. Meanwhile, gold is acting inversely, as it should. Let's notice that the price structure has sliced just beneath its Aug-Jan support line (today at $1107.25).
Inability of prices to climb and sustain above the trendline as the session wears on, coupled with continued demand for the DXY could press gold prices quickly towards a test of the December low at $1074.00.