US Dollar Index and Euro … come to papa!

here is the EUR vs USD. note, a pretty wide band of target zones and when working w/ FX that’s just too much risk …

so, a majority of the USD Index is made of Euro so what is the USD doing and we can use that as a mirror image …man, what a target zone on the USD!

FX Currency update

last post on US Dollar Index:

well, it’s certainly getting interesting.

watch the levels shown on the GBP and the EURO and USD Index to get a feel for what might be coming this week.

IF we hold these levels then expect dollar strength .. EURO and POUND weak.

IF we FAIL on these sell patterns for the EURO and the POUND then the dollar will take a pounding and go right into the level we have been waiting for what seems like a LONG LONG time … stay tuned tonight.

personally, WAITING and have a “hunch” that the levels will fail (USD weakness) and go forth and attack the lower level shown on the USD Index which is the SAME level equal to EVERY move lower in the USD in the past 30+ years. worth waiting for … don’t you think?

USD Index – close to a BIG move UP?

if you have been following my blog, you’ll remember the big measured moves that were around when the dollar was carving out THE low. they have appeared/are appearing again. w/ a wrinkle … using “basic” monthly cycle tools you can see that we have a BIG cycle coming in this month which lines up w/ the measured move target zone a little lower in the index. this could be a BIG DOLLAR MOVE higher ….

below you’ll find the chart that started the dollar bears growling and stopped the dollar bull in it’s track. the form, proportion and balance are amazing and exact. take time to study this chart

the time and price symmetry of the latest high on the USD Index

since then, the USD Index has basically been carving out what looks like a flat correction and then higher … you can read prior posts to see if this was an A-B-C correction or 1,2,3,4 (in work/finishing) and then higher in a big 5th wave. we are getting a little below the end of wave 1 which breaks a rule if your a purist but it sure looks like we are bottoming. then, the last chart is an intraday chart showing a possible mathematical derivation of wave length based on fibo relationships that could get us into the target zone … so, stand by, as this is a BIG level coming up on the USD.

notice the dashed black and blue arrows, they are exact measured moves and then note the long term cycle that is hitting this month

2 hour intraday chart showing wave relationships that could get us down into the target zone .. used equality of wave 1 and 1.618 wave 1 to project.

the USD Index

One of my favorite pastimes is to look at everything in the context of the circle of life – fixed income, equities, commodities and FX.  By far the largest and most liquid, the FX market is the real “elephant in the corner”  and drives a significant share of the moves we see w/in the entire trading universe.  

Attached is the dollar index and a possible count showing the high at 84.76 finishing a 5 wave sequence. The “a” “b” “c” correction unfolding is, still, a bullish correction and one that should find support in the 78.72-80.15 region. The key w/ this chart is the blue “measured move” correction w/ regards to time.  Technically, we still have to next week where time and price would be equal. That level is 79.34. Additionally, once we have completed this 5 wave sequence, the corrective move is usually down to the beginning of the 4th wave of a lesser degree. 

The only issue that I can see w/ this count is the extended third wave (green). One of the rules of Elliott is wave 4 cannot overlap wave 1 and you can see w/in the fractal of the wave 3 (green) we do have some slight overlap of 4 and 1 (white).  In the FX world,  I consider this negligible and the subsequent 5 wave rally is orderly and nice.

Last point – I’m seeing the top in/around the 84.76 area as 1 of 5 to come ….stay tuned, if this count is correct the dollar will take off.  

August 20 2013 US Dollar