As shown on the daily chart, the dollar is now consolidating gains right about the 200 day EMA -- a situation better shown on the 5-minute chart as a tight range between 21.79 and 22.05. A consolidation -- especially after such a large move -- should be expected. The dollar is in somewhat of an off place right now. Although the US economy is clearly slowing and has incredibly low interest rates, we're the last safe haven around with both Japan and Switzerland demonstrating they will intervene to lower the value of their currency and the EU in disarray. On the daily chart, don't be surprised to see the dollar fall back to the 10 day EMA, which is currently a bit above 21.6.
The 5 minute SPY chart shows prices have clearly moved out of a consolidation pattern, but the daily chart is still very weak: prices are still in a channel, the EMAs are still neutral and prices are below the 200 day EMA. The equity markets are still very sick. Ideally, prices need to move through the 50 day EMA on decent bars to convince me things are going to improve. However, I still think we'll eventually move lower; there's just too much weight from the EMAs -- especially the longer one.
Gold is also consolidating. The shorter EMAs are moving sideways and prices are using the 20 day EMA for technical support. The EMAs are still bullishly aligned. The 50 and 200 day EMA signal a very strong market. My assumption is gold will continue to be a beneficiary of the safety trade, especially as US treasury yields continue to move into deeper negative territory.
