Sunday, March 15, 2015

U.S. dollar /DX $USD Fibonacci projections reveal up-wave target nearby

The U.S. Dollar index has been on a persistent uptrend since breaking out from a very long range. It's already retraced to the 95-96 area representing a 50% retrace to an interim high on the monthly chart, and is now approaching a 61.8% retracement level slightly above around $101.66-$102. But there's also another way to measure the likely Fibonacci target for this up-wave.
The Fibonacci extension of its initial move up from 71.33 to 88.71 can be measured, first as a direct 1.618 extension from 71.33 which got it to the 99 area. But better, measuring the length of the move from 72.70 as being 1.618 of the length of that initial move up from 71.33, points to 100.82 which is only slightly above where it is now.
This gives us the range of 100.82 through 102 to look for a completion target, at least for the current wave. Below is the weekly US dollar chart $USD (as charted at showing it's already poked R2 level resistance, therefore another reason to look for some completion in this area. Naturally this would also impact the euro and other currencies, and likely bonds, not to mention commodities ranging from crude oil and gold to (at least potentially) agricultural commodities like corn and wheat.
The daily chart (below) shows how the dollar continued up after a triangular range, which was from its testing around the monthly 50% retrace level about 95-96. That recent consolidation range will also provide support around 94/95 (where the 50% monthly chart retrace had been tested), if it does indeed crest around 100.82. (Also remember, with a Fib target like this 100.82 projection, it can oscillate the number; plus, the Fib retrace levels 101.66-102 might need testing also, before this up-wave crests.)
Adding to the potential for the U.S. dollar /DX to have some respite from its persistent wave up, is that even the bullish point and figure (P&F) chart has registered a high-pole warning from last week. Its reversal marker suggests that if it loses 95/96 (not necessarily expected to occur), then we could see if retest lower. Clearly the 88-89 area would be support if it breaks under the triangular range area of 93-94, because of the prior highs there as well as the .382 monthly Fib retrace level that had been exceeded when the dollar broke above those prior highs. So the first place to look, assuming the dollar taps 100.82 (ideally) and turns, is for support really in the 95-96 range (maybe a quick poke in 94.xx's), then some effort to hold and retrace or resume upward. But if, after such effort, it doesn't hold above 94 (as I'd expect it will), then we may actually see it fall even lower (which I'd be surprised to see) retesting as low as about 89.

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