The weekly euro chart shows how the long euro rally is breaking down. The rally above resistance (the red line) has now failed and last week saw the sell net-line (yellow dots) penetrated. This euro drop/dollar rally is impacting gold and oil.
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However in the shorter-term, the daily euro chart is close to its lower channel, suggesting a counter-trend euro rally and dollar drop is due.
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The daily gold chart has also reached its lower channel. But note that neither of these markets has generated any other buy type indications, neither RSI divergences nor cycle-trap turns.
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Crude oil has finally made some attempt at forming a base at the price level expected to provide support in this Oil Levels commentary last week. Oil has formed an RSI divergence (green arrow) but its upside appears limited, as evidenced by the fast reversal on Friday when it touched the buy net line resistance at 128.
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The bottom line is that a dollar rally is bringing weakness to gold and oil, but this new trend is due for a rest and these markets should either pause or enjoy counter-trend moves over the near term.
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