The Dollar and Metals Are Approaching a Make-or-Break Moment

The dollar is attempting to reclaim lost ground and is now battling with a major resistance cluster that includes last week’s bearish gap and an active island reversal pattern. At the same time, gold has started to show the first meaningful signs of very short-term weakness after losing an important bullish gap, while silver continues to display relative strength.
In other words: the technical picture is becoming increasingly polarized.

U.S. Dollar Index (DX.F)

Yesterday’s session brought another failed attempt to close last week’s bearish gap, but the fresh buy signals were enough to encourage bulls to take another shot.

And this time, the setup looks much more promising.

Buyers have pushed the dollar not only above the upper boundary of the orange consolidation, but also above the top of last week’s bearish gap. Right now, they’re battling with the final obstacle: the bearish island reversal we’ve been discussing over the last few sessions.

That formation is still technically active, which means the fight isn’t over yet and as always, the real verdict will come at the close. Today’s daily close will tell us who wins this round and whether momentum shifts decisively back in favor of the bulls.

That’s why, for now, yesterday’s commentary remains fully valid.

But before we turn to the metals, there’s one more chart worth looking at: the 4-hour timeframe.

From that perspective, we see that the current resistance zone becomes even more important because it is reinforced by the upper boundary of the green rising channel. Despite two separate attempts, buyers still haven’t managed to break through it.

On top of that, both CCI and Stochastics are showing negative divergences, meaning price is pushing higher while momentum is starting to fade.

That doesn’t guarantee an immediate reversal, but it does suggest caution.

At these levels, in our opinion, the smarter move may be to wait for confirmation in the form of a strong daily close rather than assuming the breakout is already complete.

Palladium (PA.F)

Palladium’s picture has deteriorated noticeably.

Yesterday’s failed attempt to close Friday’s bearish gap led not only to a test of the nearest support – the May 5 bullish gap – but also to a retest of the lower boundary of the orange consolidation.

That’s significant because it shows bulls allowed sellers to push deeper than they had during previous sessions.

Adding to the bearish tone, yesterday’s candle formed a dark cloud cover pattern, suggesting that another attempt to break lower may be just around the corner.

However, there is still one important line of defense. In our opinion, as long as the May 5 bullish gap remains open, bears do not yet have a clear runway to the downside. Until that support is decisively broken, sideways trading within the consolidation remains a very realistic scenario.

Today’s Takeaway & Key Levels To Watch

For Dollar

• Watch the 98.20-98.31 resistance zone closely because this is where last week’s bearish gap and the active Island Reversal come together
• Daily close above 98.31-98.45 -> significantly improves the bullish outlook and opens the door to 98.75-99.68
• Failure to close above resistance -> keeps the dollar trapped between gaps
• Rejection from current levels -> could support gold and silver in the very short term

For Palladium

• Watch the May 5 bullish gap at 1481-1494 because it remains the key support zone
• Friday’s bearish gap at 1492-1523 continues to cap the upside
• Daily close above 1523 -> improves the technical outlook and increases the odds of a larger recovery
• Daily close below 1481 -> opens room for a deeper move lower while keeping the broader consolidation under pressure
• Palladium remains the most fragile chart in the group, which makes confirmation essential before considering new positions.

Wait for confirmation, protect your capital, and stay one step ahead.
Anna