In the last few weeks and the turmoil in world events, the US dollar is very close to making new record bullish highs. This 97.100 price range is also producing potential resistance. Will the USD keep on soaring or will it implode due to all the stories about how Russia, China, and Iran are buying gold to destroy the US dollar! They can’t be buying gold, or they have stopped buying gold because gold has been crashing as the US dollar is soaring.
I won’t repeat any of the fundamentals as thousands of analysts have got that covered. I look at the COT reports and a month or so ago, the commercial hedgers removed a “Large” amount of long positions, with last weeks positions creating a net short ratio of 48.36:1. In other words, commercial hedgers are bearish by a wide margin, but yet the USD is still going for record highs.
Looking for a bullish wave count under those conditions is like playing “Elliott Wave Count Chicken”, so how long this bullish push will keep going is a good guess at best.
The vertical spike last night would be enough for me to turn very bearish on the USD, but I can still see bullish wave counts developing.
Gold is reacting to the US dollar rally as expected, but its decline will also stop dead and reverse once the USD starts on a much bigger correction.