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William Yii

William Yii

William Yii (Affiliate CMT) is a professional fund manager currently based in Malaysia with extensive experience in managing Asian equities portfolios.

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Gold and Miners' (bottom) Vs. USD's (Top)?

Let's start with the USD:

  • Its weekly Head & Shoulder (H&S) pattern seems to be invalidated at first sight. However, i beg to differ and believe that the pattern still holds in a complex H&S form where multiple heads & shoulders are developing here.


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  • Looking at DXY's monthly chart from Fibonacci Fan's perspective, the strength of USD is still pretty much constrained by its 61.8% Fibonacci level. In fact, DXY could rise to about 84 and still be confined by the 61.8% Fibo.

  • Indeed, the monthly chart justifies the view that the weekly H&S formation remains intact.


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  • On USDOLLAR index weekly chart, it is about to hit the upper channel resistance any time now with a stretched overbought level, i.e expecting a correction from thereon.


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  • Again, looking at Euro-USD pair, the "reversed H&S" looks solidly intact and the recent correction back to the neck-line looks about to finish soon.


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Conclusion on USD

We are about to see its strength to stall with a reversal soon.


On to Gold:

  • Gold price continues to chop around its 61.8% Fibonacci Fan level with a mean to test higher level closer to 1,600 level.
  • In any case, the "reversed H&S" of gold may prove to be what it needs to stage a recovery soon.


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On Miners:

  • The counter rally witnessed yesterday right at its multi-year channel support and 61.8% Fibonacci level from 2008's trough to 2011's peak was not unexpected as I mentioned here
  • Indeed, if this bull were to survive, we need to see strong counter rally to prevail from hereon.


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  • Again, Miners are expected to similarly carving its own "reversed H&S" for a strong recovery, if the bull were to survive indeed.


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  • As seen in GDX, could last night's strong rally be termed as a classical "1-day reversal"?


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Conclusion on Gold & Miners

With the expectation of a stalling USD, we may finally expect a real bottom soon in both Gold & Miners. Stay tuned!

 

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