Dollar strength expected to fade
October 25, 2016
October 26, 2016

If you are following me on twitter (@alexanderyf) or just reading my analysis you will surely know by now that I have been a long-term bull in Gold specially in the $1,100-$1,050 area and again here at $1,250 after the breakdown from $1,300. At the same time I have openly expressed my bearishness on the Dollar index above 98.50 expecting at least a pull back if not a larger decline.

Gold has reached the important $1,250 support and has started making higher highs and higher lows after bottoming around $1,250. This is a very important support level for the longer-term view in Gold. A break below it will open the way for a push towards $1,220-$1,150. However as long as Gold is above $1,045 I believe a long-term low is in and that a push below $1,250 will be a gift for bulls.


Short-term view still remains bullish expecting a push towards $1,280-$1,300 area.


The Dollar index has been giving bearish divergence warnings for several days and as I have been saying in my analysis, the upside is limited to a push towards 99.50 maximum. A reversal was to be expected. Price has given the first bearish reversal signals implying a push towards 98.40-97.80 at least.

usdx usdxd

In the second chart though we see that price has reached the upper boundary of the long-term trading range that we are currently in. Support at 95 is critical for the medium-term trend. If it holds we could see new highs, but if it is broken I will expect the 92 level to be tested and most probably broken to the downside.

Alexandros Yfantis
Alexandros Yfantis
Fascinated by financial markets, studied International Securities Investment and Banking in the UK, works as a Portfolio Manager in Greece and runs a technical analysis website. Enjoys travelling and spending time with his family and preparing for the black belt in Korean Karate.