The US dollar rallied nearly half a percent off recent support near $96.50.This upside price move confirms the capital shift we have been talking about. Foreign capital is pouring into US markets and US dollar as strength in the US economy continues to dominate.

This new upside move in the US dollar has established a new lower price channel that should continue to act as price support going forward. Fibonacci price structure dictates that a higher low and a higher high price rotation may follow. We would expect some resistance just below the $98 level and if the Fed lowers the rate the dollar will likely pullback and consolidate for a few weeks to digest the news, but investors will still see the USD as the strong currency and keep buying it longer term.

It is important to understand the strength in the US dollar and the US economy should continue unless something interrupts the growth and continued out what from the US. It is very likely capital will continue to seek out the best returns and the best safety which we believe is available only in the US right now. Eventually, things may change where foreign markets become more opportunistic for investors and capital begins to shift away from the US markets. Until that happens we believe the US markets will continue to drive higher and likely push towards new all-time highs.

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The strength of the US dollar is muting the upside potential in precious metals as well as the US stock market. We believe the underlying strength and opportunities resulting from the capital shift, where capital is rushing into US markets, will eventually override the strength of the US dollar. In other words, investors will continue to pour money into US stocks and into precious metals as a protection mechanism against risk while the US dollar continues to rise.If and when the US dollar does rate below the lower price channel, the US stock market may likely breakdown as well and precious metals should skyrocket higher. Until that time, we expect a moderate price advance to continue in the US stock market major and mid-cap sectors, the US dollar, and precious metals.

Gold will likely rally from the 1340 level to just below 1380 on the next leg. Then Gold will likely cause and rotate to near 1360, pause briefly, then rally to levels above 1400. We believe this rally may happen before July 12-15, 2019.

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