Financial market traders don't have assurance yet that dollar won't rise further

While it's possible the US dollar index made its high and the euro made its low, it's too soon to say it with certainty. It matters not only for currencies but also in terms of bond rates and also, equities have tended to trade inverse the dollar quite a bit. Not lockstep, but all traders are keeping an eye on the dollar. So let's look. The euro, which trades almost exactly inverse to the dollar, was up slightly today. But the volumes indicated by FXE (the ETF tracking the euro) were downright puny (see chart below). And both FXE and UUP (the ETF tracking the US dollar) remained within their recent trend channels. Action like this doesn't herald that a trend change has occurred.

Sure, it's possible that will happen. But as chart-based unbiased traders - following the Chart Lines - we don't want to step out too far with an assumption before any confirmation. There are other wave count alternatives besides the idea of a completed zigzag symmetry, as I described somewhat this weekend. If it turns out that the trends don't change yet, then traders may dump euros and short-cover dollars upon moves beyond Friday's extreme.

And then there's the yen. FXY had a better price move today than the euro did, though the volumes in FXY weren't great either. But the sell volumes in FXY last week weren't as extreme either. I'm going to continue the bullish outlook on the yen given that it made this decent move up - it may not be breaking trendline resistance yet but it's a decent move that fits with the wave structure I've described many times before. I don't know that the yen clues us in about the euro/dollar trade however! They don't seem to move predictably enough in correlation to base a prediction. So for the euro I'm just saying it hasn't proven yet that it's not merely working off an oversold condition and getting ready to sink lower.