What's in YOUR wallet - will those dollars get stronger, or be further devalued from here?

Whose wishes will come true about those dollars that may be in your wallet - if the dollar can hold support and strengthen? I made a few posts today (here and at my UBTNB3 blog, see link at right) about the Dollar Index possibly holding support from last week's lows, along with the euro possibly going into a trend reversal pattern to point down again. And I provided a more indepth view this Saturday here, showing that this area is important for the dollar to hold support, with Cycles review, Part XI: Economic Confidence Model - and what about the U.S. dollar?! with review from Martin Armstrong (5/23/09). I also discussed my symmetry target or objective for the dollar's decline, just above key support, in this post here - Postcards from the ledge: Charts show many markets at critical levels now (5/22/09).

Yesterday the dollar moved above Friday's high, and today it held in without making a new low although it did not move above or close above yesterday's high. Is the dollar's situation as described in these articles - Tracking the Collapse of the US Dollar (Financial Market Commentary by Simit Patel, 5/25/09), and Dollar in Freefall Against Euro (Contrarian Profits, 5/26/09)? Looks like the dollar, not to mention other currencies and gold, as well as bonds and equities, continued today their process of testing critical levels. I won't promise that the dollar's movement from here holds the key to where these other markets move. But I'm rather certain that many eyes are on this, and that whether or not the dollar holds support here will prove important.

Does the Fed really want a weaker dollar? Maybe if it goes along with U.S. bonds at lower levels, if the Fed really intends to step up purchases of these bonds and wants even better prices for that. Along with the usual idea, that those who buy and hold dollar-denominated assets will "feel better" if those assets - equities, real estate, etc. - appear to appreciate (or depreciate less) as the dollar weakens further. But the dollar could go off-script and appreciate instead. If so, I'll be a bit challenged to work out its Elliott Wave pattern - could this possibly have completed a "B" wave or wave 2, pointing a "C" wave or wave 3 to much higher levels?

The dollar's movement yesterday and today was a small step in that direction. And I'll avoid trying to speculate too much about the fundamentals and the economic situation, other than to observe that it would be reasonable to expect the dollar to find support at some point (whether from here or lower) and move higher as we get deeper into the long-wave lows (you know - Kondratieff winter and all that). Meantime, I'm sure we'll be joined by many others in continuing to watch whether this turns into a trend reversal that pushes the dollar up once again.

Below is a daily chart of UUP. You may need a magnifying glass to see that the slow stochastics indicator has crossed up. It's easier to see that the StochRSI turned up again. The slower-moving indicators haven't confirmed a trend reversal upward yet. And yes, I do see that the 50-day moving average crossed under the 200-day moving average, which is a classically bearish sign. These factors should also be viewed in context of my prior posts about the potential symmetry target and the Fibonacci and chart/channel levels (referenced above; and also including this one, Gann fans (and gold bugs) take note: dollar testing the Gann angle fans and may get support to move higher - charts from PTV's Andy Askey (5/13/09) - you can also use the "US Dollar" label in the labels list at right to see all my prior posts here on the dollar). All of these together can support the case that the dollar moves higher from here. Now we just have to see if that plays out.