Dollar Pushes, Metals Rebound But The Real Decision Is Still Ahead

Markets are shifting gears again.

The dollar is testing a major resistance zone after another push higher, while gold and silver are fighting to reverse recent breakdowns. Momentum is back - but conviction? Not yet.

And that’s what makes today important.

USD Index (DX.F): Bulls Take the Lead, But the Test Is Now

Looking at the charts, we see that bulls managed to push the dollar above the resistance levels we highlighted yesterday - including the 50% Fibonacci retracement and the very short-term declining trendline.

This opened the door for a push toward the next key area created by the top of the orange consolidation near 99.96, right at the psychological 100 level.

But now things get interesting.

H4 indicators are showing bearish divergences, hinting that momentum might be fading. However, as long as these indicators don’t generate full sell signals, bears don’t have confirmation yet, which means that the real decision will come from today’s close (and the weekly close).

A strong close above resistance would confirm bullish control. Failure here, however, would reopen the downside path. So far, yesterday’s outlook remains valid - we’re still in a “wait for confirmation” phase:

“(…) Even if bulls manage to push a bit higher, real control only comes with confirmation:

• daily close above the declining trendline

• breakout above consolidation (99.96)

In our opinion, only then the path toward the March 16 gap would be open. Until that happens? The setup remains fragile and the risk of a move back south is very real - especially if H4 indicators flip to sell. 

Therefore, if bulls fail (…), bears may step in and push the dollar back toward 99 and lower in the coming day(s).

Gold (GC.F): Rebound Attempt, But Resistance Still in Control

Let’s start this section with yesterday’s quote:

“(…) Price remains below the previous consolidation and under the green rising wedge with active sell signals on H4, which means that unless bulls invalidate these breakdowns, the path toward yesterday’s downside targets remains open:

“(…) If they fail? 

Bears may step in - especially if H4 indicators flip to sell. And if that happens, the downside scenario opens the way to:

• 4398 (…)”

Looking at the charts, we see that gold delivered exactly what the Wednesday bearish scenario projected, hitting a low of 4380, which aligned perfectly with our downside target. And yes - those who stuck with the scenario had another opportunity to book gains (congratulations once again!).

After testing 4400, bulls managed to step in, invalidating the small breakdown before the close, which triggered further improvement - the Asian session then opened with a bullish gap (4409-4422), bringing buyers back into play.

As a result, price of the yellow metal reclaimed 4500 and invalidated the earlier breakdown below the orange consolidation marked on H4.