12/07 Gold Momentum Strong, Altering Next Potential Move

12 Tem 2024

XAU/USD faced some strong upwards momentum over the past day, strongly influenced by DXY tremendous drop (will cover DXY analysis in next idea). Although I was seeking a short at range highs (which provided clear resistance), momentum was quite strong and RSI tells me no sign of stoppage on the 12H.

For now, we ride trend till the end, the more i trade the more I find better results trading with confirmation (with the trend), than with speculation (against the trend).

12 Tem 2024

Not

I realised the DXY chart is shown on the other panel, although we have faced a large drop, we are coupled with strong hidden bullish divergence (continuation divergence), being that we are in an uptrend from this view, probabilities are in favour of a DXY bounce, which would correlate to the reduced inflation figures, perhaps catching investors off guard, which may be one of the reasons for the drop, however, lower inflation should be seen as good for the dollar strength, and economy as a whole, therefore medium term we remain bullish.

Short term we are still in a corrective phase for DXY, and important levels need to be watched closely ( 104.100 ), if this is lost, we can most likely confirm more drop on the DXY and expect more upside on our risk on assets (Metals and Cryptos). Breaking the low at 104.100 could mean we see a further drop on the Dollar Strength.

14 Tem 2024

Not

DXY has closed almost exactly on my marked level at 104.100, next weeks market open shall be quite interesting, as previously stated, breaking and closing below this level could signal a higher time frame correction for the DXY.

Are the inflation figures going to bounce the dollar back up? Let's see, perhaps the dump may have been just a shakeout, we can think of any number of scenarios, but the important thing, quite frankly the only important thing in this situation is the reaction to the critical 104.100 level we are currently at.