SynapseTrade

The DXY (US Dollar Index) and XAUUSD (Gold) typically exhibit an inverse correlation, meaning they tend to move in opposite directions. This phenomenon is often described as the DXY "inverse mirroring" XAUUSD. Several key factors contribute to this relationship:Gold is Priced in US Dollars: The most fundamental reason is that gold is universally quoted and traded in US dollars. When the US dollar strengthens relative to other currencies (reflected by a rise in the DXY), it makes gold more expensive for buyers holding those other currencies. This increased cost can reduce demand for gold globally, putting downward pressure on its price. Conversely, when the dollar weakens (DXY falls), gold becomes cheaper for foreign buyers, potentially boosting demand and supporting higher gold prices.Gold and the US Dollar as Alternative Stores of Value: Both the US dollar and gold can function as safe-haven assets, sought after during times of economic or geopolitical uncertainty. However, they can also be seen as competing stores of value. When confidence in the US dollar is high and the US economy is strong, investors might favor dollar-denominated assets. Conversely, during periods of inflation, concerns about currency devaluation, or broader financial instability, gold is often viewed as a more reliable store of value, leading investors to move away from the dollar and towards gold. This shift in investor preference contributes to the inverse relationship.Interest Rates and Opportunity Cost: The value of the US dollar is heavily influenced by interest rates set by the Federal Reserve. Higher interest rates tend to attract foreign capital seeking better yields on dollar-denominated investments, thereby strengthening the dollar. Gold, on the other hand, is a non-yielding asset – it does not pay interest or dividends. When interest rates rise, the opportunity cost of holding gold increases compared to holding interest-bearing dollar assets. This can make gold less attractive to investors, leading to decreased demand and potentially lower prices, while simultaneously supporting the dollar. Conversely, lower interest rates reduce the opportunity cost of holding gold, potentially increasing its appeal. In summary, the inverse relationship between the DXY and XAUUSD is primarily driven by gold being priced in dollars, their roles as competing safe havens or stores of value, and the impact of US interest rates on the attractiveness of dollar assets versus non-yielding gold. While this inverse correlation is a general trend, it's important to note that various market dynamics and global events can sometimes cause temporary deviations from this pattern.

Based on SMC Fair Value Gaps and rising Relative Strength Index, and other technicals. Upper boundary at next Bearish Fair Value Gap

Educational purposes only, not current analysis. A Fair Value Gap (FVG) represents an inefficiency in the market where price has moved rapidly in one direction, leaving a "gap" on the chart where minimal trading occurred across a specific price range. This is typically identified by a three-candle pattern where the wick of the first candle and the wick of the third candle do not overlap the entire body of the second, strong directional candle. Traders often anticipate price to eventually return to "fill" this gap.   An Inverse Fair Value Gap (IFVG), also known as an Inversion Fair Value Gap, occurs when a standard FVG is invalidated. This happens when price trades completely through an existing FVG, suggesting that the initial imbalance has not been filled as expected. The key characteristic of an IFVG is that the area of the original FVG, after being broken through, can then act as a support or resistance level when price retests it from the other side.

Long term, XAUUSD is on the rise as a safe haven during these unstable geopolitical times. It is currently heading towards a good FVG in the area $2,911, presenting an excellent opportunity to go long up to the next FVG on the 15m chart

Price has naturally dipped after market roll-over and has passed down into an Order Block during Asian session, providing an excellent opportunity for a long position all the way back to the previous high, if not higher. FVG Indicator - Synapse FVG Beta 7

Price tapped into the outlined FVG indicated by purple box and has high potential to continue its upward trend close to 2,968. Possible re entries into FVG during early Asian session before more upward movement. Keep on eye out for new FVGs to enter into a long position and trail your SL below them

FVG on the downside being tapped by price right now, which has potential for a good setup for a short position on BTCUSD. Market recovered somewhat during after-market hours but it looks like it's likely to continue it's downtrend Indicator used: custom experimental SMC FVG finder

Once the price fills the Fair Value Gap - The price will be forced to continue the downtrend that is forming on higher time frames.