The US Dollar Index broke out of its trend channel, warning of a correction back to 76 on the daily chart. Respect of 76 — or 63-day Twiggs Momentum respect of the zero line — would confirm the primary up-trend and offer a target of 84*.
* Target calculation: 80 + ( 80 – 76 ) = 84
Spot gold rallied as the dollar weakened and is testing its descending trendline and resistance at $1700/ounce. Respect would signal a decline to $1500*, while upward breakout would indicate that the correction has weakened but not necessarily ended.
* Target calculation: 1700 – ( 1900 – 1700 ) = 1500