Following the recent potential wash-out/bear-trap move below the 114.50ish triple-bottom support, GLD has been backtesting that support level from above, possibly building the energy to mount a sustained breakout above the yellow downtrend line (bullish scenario), while a solid move back below 114.50 & especially the 109 area would be bearish. While the longer-term trend is still down to sideways, the current short-term trend is up with GLD making a series of higher highs & higher lows over the last 5 1/2 weeks.
GLD 2-day Dec 17th
This is the fourth divergent high in the US Dollar Index over the last 4+ years. The three previous divergent highs resulted in significant corrections. Should those divergences play out for another correction, precious metals & commodities are likely to rally.
DXY0 2-day Dec 17th
EUR/USD recently broke above this bullish falling wedge pattern & is currently backtesting the pattern from above. The Euro alone accounts for nearly 58% of the performance of the US Dollar Index ($DXYO/$USD). If history is any indication of the future, the EUR/USD pair is likely to rally soon following this most recent oversold weekly RSI reading, especially considering the pair just tagged the bottom of this large triangle pattern (support).
EUR-USD daily Dec 17th
EUR-USD weekly Dec 17th
Behind the Euro, the Yen is the second largest component of the US Dollar Index at a 13.6% weighting. Like the Euro, the Yen also looks poised for a major reversal with a likely downside target in the USD/JPY pair of around the 110-111 area.
USD-JPY weekly Dec 17th