The Reversal of Doom For Gold And What’s Ahead for 2021
This is my first report of 2021 and I hope everyone had a festive holiday season. I wish you a healthy, happy, and prosperous year ahead.
Certainly, it looks to be an eventful one. We’ve already had no shortage of fireworks in the United States, figuratively, metaphorically, and literally. That includes a storming of the Capitol building and a huge spike in coronavirus cases (over 258,000 per day).
But as regular readers know, ultimately the news doesn’t matter for us as traders. Our job is to objectively look at the price patterns and the price action on our charts. That’s because the market is a discounting mechanism and points where it wants to go ahead of news or events.
That’s why the best way to be successful in trading is to focus on objective information in front of you.
So let’s start looking at our first charts of 2021 so we can piece together a strategy that will hopefully make us some solid profits this year.
Here’s the USDI (the US Dollar Index) on a weekly basis, meaning each bar represents one week of trading:
I've been very bearish on the dollar since March 2021 -- at the height of the pandemic -- when a huge double top price pattern formed. Not only was this double top very ominous in and of itself, it coincided with a major resistance area along a 43-year downtrend line in USDI.
That double top has thrown the previous 10-year uptrend into reverse. That’s why I feel that over the course of time, we’ll see USDI get much weaker.
Having said that, USDI is at a major support area right now. Just last week it traced out a tiny bullish key reversal. (By bullish key reversal, I mean that the market made a new low, and then by the end of the week, it closed on the high.)
That key reversal suggests USDI is trying to grab a foothold at a major support area, so USDI could bounce back and forth for a while before an eventual capitulation to the downside.
The drop seems inevitable when you look at not just the double top, but also the head and shoulders with a sloping neckline. (A sloping neckline is when you have the right shoulder lower than the left and you draw the neckline to connect the entire pattern.)
A sloping neckline on this pattern is extremely bearish, so notwithstanding the fact, USDI could have a slight pullback above the neckline, the decisive move should be down.
In anticipation of this weakening trend in the US dollar, the currency I favor most is the Australian dollar.
So here’s AUDUSD (the Australian dollar versus the US dollar):
AUDUSD shows the upside-down version of USDI with an inverted head and shoulders. This too has a sloping neckline as the right shoulder is sitting higher than the left.
This implies extreme bullishness for AUDUSD. The pair should go higher very quickly and I would greet any pullback (if we see one) as an opportunity to go long in anticipation of much higher future prices.
Sticking with my theme of a strong Australian dollar, here’s AUDCAD (the Australian dollar versus the Canadian dollar).
Much like AUDUSD, AUDCAD has similar patterns and implications.
There is an inverted head and shoulders and a sloping neckline. Again, this implies a swift move to the upside in the near future.
This reinforces my thinking that the Australian dollar is the strongest currency on the board against most major currencies right now...
My first Weekly Video Report of 2021 was just released and it covers all the essential details you need to know to start your year as a trader.
Your opportunity to access this week’s members-only Video Report ends this Friday at midnight.
Why miss out when watching it is so very affordable?
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YOU decide how much you think the Video Report is worth -- just pick the price you want and start watching. It’s that easy.
This week’s key focus is 2021’s best trades now that the holidays are behind us. I cover everything you see below in more than 32minutes of careful analysis:
● What USDI (the US Dollar Index) did last week and what it means for short-term and long-term price action
● Which currency should be king of theFX markets for the first part of 2021 (starts at 3:40)
● Why so many of the JPY pairs are ambiguous right now and what to do about it
● Is the Euro going up or down? And why? (Learn more starting at 7:53)
● What the price action in USDJPY means and how you should approach this pair
● Revealed: the key price levels forEURJPY and GBPJPY (starts at 13:57)
● Is silver correcting or is this a trend reversal? (find out at 23:50)
● The large long-term pattern that means gold could hit $1,700 early this year
● Why the NASDAQ keeps going from strength to strength (and why current prices are dangerous) (30:12)
● Plus much more!
Choose a price that makes you happy, then access my Report right now -- before the clock strikes midnight:
There’s no commitment and no minimum investment. Just name your own price’ and start learning!