This U.S. Dollar Pattern Could Spell Trouble For Precious Metals!
Chris Kimble | Jul 09, 2018 07:22AM ET
The currency markets could be setting up for a big move. And this could have big-time effects on the other markets, like precious metals.
It all starts with the US dollar
Below is a long-term chart of the US dollar vs the euro. At point (1) we have a potential inverted head and shoulders pattern (bullish) for the US dollar and at point (2) a potential head and shoulders pattern (bearish) for the euro.
Note the confluence of support (dollar) and resistance (euro).
A strong dollar typically isn’t a good thing for commodities, and especially precious metals like gold and silver. Precious metals bulls have their fingers crossed that the US dollar doesn’t break out above the neckline at point 1 or the euro below the neckline at point 2. Stay tuned!
US dollar vs Euro – Long Term Chart
Should the US dollar find the point (1) to be very strong resistance and Euro find support to be very strong at (2), metals should experience a nice rally in price. What King dollar does at (1) will be very important for metals going forward.
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