Chart of Gold Denominated In Euro, Perfect 50% Retracement, Dollar Overbought and Facing Resistance
I want to include a chart of GLD in terms of Euros. Last week with some of the U.S. data combined with the news from Greece and Dubai pushed the dollar higher and exaggerated the decline in gold in terms of the chart analysis. When looking at the chart through “Euros” eyes it is clear that we are in a healthy bull market correction.
Notice how the 50 day moving average has not been violated. Also there occurred a perfect 50% retracement. I outlined the continuation patterns above and believe that gold, silver and base metals will continue higher. The minor trend correction appears to have ended.
The dollar is overbought and is facing resistance. The recent collapse in other currencies coupled with the dollar being very oversold created a climate for a strong counter trend rally for the dollar. It appears to be stalling this rally and do not believe the long term picture has changed.