Gold Rallies as D.C. Uncertainty Sinks the Dollar

Since Sept 5, the US Dollar Index (DXY) has declined from 82.67 to 80.07, or -3.2%, which has pressed it beneath key near-term support at 80.90/60 towards a test of near 2-year support beneath 80.00.

Right now, my pattern and momentum work on the DXY indicates that we should view all of the weakness off of the July high at 84.75 as a correction, rather than the start of a sustainably bearish period.

That said, however, if the DXY breaks critical intermediate-term support at 79.00-78.60, then the full weight of a 2-year topping pattern will rain down on the greenback.

While the DXY presses under 80, spot Gold should be above to claw its way up to $1400 again.