US Dollar and Gold Battle of the Cycles

By: Surf City | Tue, Feb 21, 2017
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Nothing has changed from my last post on this pair. I mentioned we should expect some backtesting and that is what I am seeing on the charts. This should be expected, IMO as both are at a key inflection point in their longer Intermediate Cycles and the battle is on. https://surfcity.co/2017/02/15/usd-and-gold-update/

Many will want to know if the PM complex will make new highs above last Summer before we top in this Intermediate Cycle? While it is possible, my expectations are that we should test and breach the Red Yearly Cycle downtrend on my Gold Weekly chart in Trading Cycle #2 and then we need to see how Gold reacts after its TC2 Low as the USD may be moving out of its longer Intermediate Cycle Low around that time. The key to my last sentence was "may be," so we will recalibrate our next steps at that time.

Below are two charts on the USD followed by two charts on Gold. Each pair of charts has a near term Daily and a longer term weekly to show you where they are in their respective Intermediate Cycles and the struggle that is under way in these two related markets.

USD Daily and Weekly:

US Dollar Index Daily Chart

US Dollar Index Weekly Chart

Gold Daily and Weekly:

If you follow Fibonacci levels at all, we often see some kind of pullback in an uptrend near the 62% retrace level. My Gold weekly below shows you this possibility on the chart as a 50% retrace won't break my Red Yearly Cycle downtrend. Also note, however, that TC1 topped out near the 38% Fib Retrace level from last year's July High before moving into the TC1 Low. Lastly, the TC1 Low was a Fib 38% move lower from the rise out of the Yearly Cycle Low in December.

Who was that Fibonacci guy anyway and how did he know his arcane math would work on Financial charts before they even existed? He must have been some kind of super nerdy dude…

Surfer Dude hangs with Nerdy Fibonacci Dude. I love it! Smile

Daily Gold Chart

Weekly Gold Chart

 


 

Surf City

Author: Surf City

Surf City

Surf City is 60-year-old retired Information Technology Executive and Software start-up Entrepreneur living near the beach in California.  He has been an active investor and trader since the mid-1980s. Analytical by nature, his sound investments over the years allowed him to retire at a relatively early age of 55.

In addition to the standard Technical Analysis tools of Edwards and Magee, Surf is a disciple of Walter Bressert's Cycle Methodology and Stan Weinstein's Stage 4 Market annalysis. Surf combines these skills to develop his unique "Cycle Price Channels." Some call them "Surf's ForkCycles."

In addition to Bressert, Surf also utilizes the Gann expertise of his colleague, Norvast to collaborate on possible turn dates. The combination of Bressert and Gann Cycle methodologies along with Surf's Price Channels allow the Subscribers to "Visualize" where Surf feels price is likely heading, topping or bottoming.

Surf is also an avid teacher and mentor who enjoys helping others learn the tools of the trade.

Surf's Up, Ride the Wave!

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