Gold Market Wire
News, analysis and commentary for gold traders and investors
Setting Out the Dollar's Challenge
January 25, 2021 - (Gold Market Wire) - The Dollar is sitting right on the (down) trend line as Euro Bulls, (i.e. Dollar bears) look to the market to hold. Right now, it is. The 50-day moving average has held (see chart below) and the trend line is also in tact. But, make no mistake, unless the Euro/USD cross can galvanize another run at 1.23 - 1.2350, the Dollar is going higher. On a very short term basis, the Euro is holding on - just. But the uptrend needs to be resumed for the Dollar bears and, by argument, the Gold bulls, to have their cake.
Some may have a problem with our chart formation - but we stand by it. Nov. 5 marked the beginning of the Dollar's (short term) fall and the Euro's rally. The trend line has been shadowed by the 50-day moving average. The Euro is now trying to hold on. Gripping stuff - - and Gold's retracement back to its natural "comfort zone" at $1850 comes as no surprise. Gold is now waiting for the FX market to make its move. Until it does, the market is likely to be quiet.