TECHNICAL ANALYSIS: Gold vs USD (UPDATED WEEK 50) 16TH DEC 2018

 

For those whom have followed my post on Gold, the below analysis would be extremely useful for us to consider. I will be covering the past year’s correlation of Gold vs USD and the current strength of USD.

 

 

Gold vs USD correlation (Updated 16 Dec 2018):

  1. Historically Gold and USD are having an inverse relationship
  2. However, we can see that this is starting to change since 2016.
  3. Referring to the chart, we can see that Gold was lowest in Dec 2015 at 1,046 where USD Index peak at range of 104
  4. Gold was at 1,246 when USD Index peak again at range of 104 in Oct 2016 this shows the first sign where Gold is not 100% correlated with USD
  5. In 2018, while we can see that Gold has retraced back to 1,160, it has started to go up since Aug 2018 where USD is going up.
  6. In conclusion, while we are seeing USD going up in the immediate term, gold might not go down to the same extent.
  7. In fact, the could be a high possibility for Gold to spike up when USD reaches the peak of range of 104 and start to reverse.

 

 

Strength of USD (Updated 16 Dec 2018):

  1. Basis short term chart, USD Index is showing signs of bullishness
  2. Technical analysis indicators are showing early signs of bullishness in RSI, MACD & Oscillation. However, confirmation is needed on the same.
  3. However, do take note of the 97.84 level where it seems to be a strong resistance basis Fibonacci 61.8% resistance line.
  4. The confirmation of bullish trend would be the event where USD Index break up above 97.84.
  5. It would be interesting to monitor how USD Index moves in the upcoming week.