Friday’s breakout above the key 1728 resistance level on /GC (gold futures) is at risk of failing should the negative divergences in place on /GC & the positive divergences on /DX (US Dollar futures) play out for trend reversals on both with a sell signal to come on a solid break below both the uptrend line & 1720ish level on /GC. 60-minute chart below.
GC 60m April 13th
Likewise, /SI silver is testing trendline support with negative divergences in place at the recent high with a sell signal to come on a solid break below. To be clear, both silver & gold are currently in uptrends without any sell signals. Essentially, there are bearish technical postures on the 60-minute charts of both but for now, both remain above key support levels & may or may not continue to rise & burn through the divergences in place at this time. However, should both /GC & /SI break the aforementioned supports, at least a near-term pullback is likely & possibly more, as that has the potential to cause a bull trap/failed breakout in gold.
SI 60m April 13th
As the gold typically moves inversely to the US Dollar (one up, the other down), I’m also keeping a close eye on /DX (US Dollar futures). /DX has just reversed off the 99.117 support level with bullish divergences in place & a potential buy signal to come on a break above the downtrend line + 100.012 resistance level. 60-minute chart below.
DX 60m April 13th
As the largest component of the US Dollar Index, I’m also watching the Euro. /E7 (Euro futures) has reversed off the 1.0989 resistance level with negative divergences in place with a break below the 1.0940ish support likely to spark a drop to the uptrend line (S2). If so, I would expect a bounce off the initial tag of that TL although should /E7 go on to break below that uptrend line soon, along with a breakout above the comparable downtrend line& 100.012 resistance level in /DX above, that would likely trigger a larger drop (rally) in the Euro (US Dollar) and put additional pressure on gold & silver.
E7 60m April 13th