Gold Looking Bearish
With last weeks bullish performance of the US Dollar against the Euro, we have now seen a fall in the value of Gold. The performance of the USD has an inverse effect on the value of Gold.
Looking at the Technicals
The daily chart shows the head and shoulders pattern for GDX. The blue line indicates the region of support. The price of Gold has broken through the support line - carrying on in a bearish trend. Worth noting is the price is now moving well below the 55-day SMa for the first time since early September.
Trading Opportunities
For options traders, further downside on GDX is expected if the USD continues to rally. The head and shoulders pattern seen in the GDX chart is a strong bearish indicator, giving traders the opportunity to go short on Gold. For currency traders this presents an opportunity to trade AUD-USD, a pairing that closely moves in-line with the value of Gold.
By keeping a close eye on commodities, the currency trader can better predict future trends with specific currency pairings, including AUD-USD for Gold, and CAD-JPY for Oil.
For an independent view of Gold technicals visit GoldStockProphet.
In the News
The US Dollar remained up against 14 of the 16 most actively traded currencies. “The dollar may strengthen to $1.40 per euro by year-end, according to Schlossberg.” - Bloomberg
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