It is usually not a coincidence when a market declines to, and reverses from, both a significant support line and a major Fibonacci support zone (62%).
That's exactly what gold just did, as the price structure pressed to a post-election low of $1171.74 -- within the support range of 62% Fibonacci support of the entire Dec. 2015-July bull phase at $1172.70, and at the vector support line off of the Dec.-Jan. lows, which cuts across today's price axis in the vicinity of $1170.00.
Spot gold has since ricocheted from $1171.74 to an intraday high at $1193.26.
All eyes now are on $1184.05 and $1190.76.
A close above the former will represent a simple, but meaningful, upside-reversal session, while a close above the latter will put in a potentially more significant key upside reversal.
Meanwhile, DXY has the right look of near-term upside exhaustion, accompanied by a potential downside reversal in the aftermath of its 6.4% vertical 12-session assault in reaction to the Trump election victory.
If weakness does develop, it will diminish some of the intense dollar headwinds impacting the precious metals since election night.
That said, any weakness in DXY should be contained above 101-100 support ahead of additional upside pressure. Only a decline that breaks and sustains beneath 99.80 will begin to compromise the big-picture upside breakout.
