The US Dollar has just experienced the Cross of Death as the 50dma crossed through the 200dma in a downward motion heading south.
The Cross of Death is usually a negative indictor and so one would now expect the US Dollar to head south. However, this is not always the case as a certain amount of damage has already been done in recent weeks. The dollar had traded as high as ‘100’ in the first quarter but of late the ‘95’ level has been more par for the course.
Also note on this chart that the MACD is about to form a positive crossover which, although not as strong as the cross of death, usually has a positive effect.
The RSI has dropped and then bounced off the '30' level and is now heading north which is another good sign.
All in all we see this particular set-up as fairly neutral for now and would expect the any word from the Federal Reserve regarding a possible rate hike as having more effect on the dollar than just about anything else.
For now we will hold dollars until gold makes a bottom before becoming aggressively bullish on the precious metals sector.
Take care and go gently.
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