XAUUSD Gold vs Dollar Index and Potential Trade Opportunity
Renewed and elevated concern over the trade dispute that is now being labeled as a trade war between the United States and China has continued to be highly supportive of the U.S. dollar. Geopolitical concerns about Saudi Arabia, concerning the disappearance of an American resident, and concerns about the European Union as it deals with issues from both Italy and Turkey have also added to dollar strength.
There is a battle of sorts between the safe haven asset tendencies inherent in the U.S. dollar and gold. ( Even JPY in an apporach )
Gold was able to survive against DXY rally so far. DXY reached the resistance region. A potential bearish retracement on DXY may trigger the Gold’s Bullish Move.
What can be done:
Technically, we see a flag pattern and this pattern mostly appears to be a bullish continuation pattern.
Bullish Breakout of the pattern – somewhere 1230 – can give us a long opportunity targeting 1243 and 1250 with stop loss below 1218.
1244 – 1250 interval is the trend reversal region and Gold prices may reverse at this main resistance.
You can view the chart: GOLD VS DXY
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