Watch that last step! Dollar index fell under Fib. at 74.75, so it's up or out

The U.S. dollar feels like that old joke about "watch(ing) that last step" - because as you're going down the stairs, you learn the hard way there are a couple steps missing and you fall hard. So the "last step" is actually a gap where you fall down the rest of the way. But - here's the important question: is this fall underneath 74.75 in the dollar index ($USD) the rest of the way? meaning the bottom? Well the indicators support the possibility of a trend reversal finally, but there's no way we can confirm one unless and until we see a reversal pattern print out. That will take at least a couple more days. If a brief poke under 74.75 isn't followed by a trend reversal, then we'll need to think about the 73.58 - even though I'm not as keen on that, but will see.

The dollar seems to be the opposite of gold right now - another reason we'll have to give it a couple of days to show if it can recover from this strong test of Fibonacci retracement support. I'm not wedded to the idea that the dollar must vault to new highs ... I'm basically thinking that a reversal from this low can lead to a sizable rally. Once we see a bounce we can start measuring the Fibonacci levels for a retracement (such as 50%, to 82 in $USD).

But if we don't see a reversal start over the next 3 to 5 trading days - then look out, because that "last step" might be more scary than eager policymakers might want!