The dollar made a drastic drop this past week, reminiscent of the one it experienced in December 2008. Perhaps it's partly for that reason that I believe it may yet have some life in it. Doesn't mean that it doesn't have a little farther down to go, perhaps to test the area around 80 on the $USD chart. I made a commitment to further analyze the dollar and present some Elliott Wave possibilities from here. Well, I was able to fill out my analytical framework and you can see the results on the two charts below (daily and monthly $USD charts). I think that one Elliott Wave alternative would be that the dollar tests a bit lower, then has one more rise ahead of it to slightly above the 90 level. This would likely view the count as in the midst of an upward diagonal. You can see on the monthly chart that the dollar tested up to the .382 retrace back to its high levels of about 2001/2002. But these charts can also be interpreted more bearishly. The most obvious would be that the dollar is in the 3rd wave of a first wave down, then the next we see is a pullback 2nd wave up, prior to a deeper third-wave push down.
The bearish view of the dollar would be consistent with both the ideas of gold moving much higher in an inflationary push; and, with the views I marked on the yen chart below - in which the yen may have another push to higher levels (above $135):
I'm not able to "pick" at the moment whether to adopt the more bullish or more bearish view of the dollar. I don't want to just pick one hastily, since I can see arguments either way in these charts; so I'll try again in the coming days. However, what I can say is that I do lean to the idea that the dollar is going lower, and the yen is going higher - but I just don't have a good feel yet for whether they are both on the march to do that, or whether there's one more surprise in the other direction first.
Posts
No comments:
Post a Comment