A new high in the US dollar? Rationales are stacking up…

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Quotable

“Life is a succession of lessons which must be lived to be understood. All is riddle, and the key to a riddle is another riddle.”

--Ralph Waldo Emerson
 

Commentary & Analysis

A new high in the US dollar? Rationales are stacking up…

1.     US Dollar Index Wave Chart: We have cautiously maintained our US dollar bias through the latest downtrend measured from the beginning of April this year labeled wave [b]. We have been suspecting/hoping (given our positioning) the dollar was correcting lower in what is a standard zig zag (A-B-C) correction lower completely Wave 4.  But this move has been deep and many have jump aboard the top is in train of thought.  As the dollar neared a key support level, which we have labeled a 50% retracement (98.40) of the last major Wave up—Wave 3—it did so with a slight divergence in momentum; i.e. lower prices but momentum oscillators turned higher.  We think today’s sharp rally in the dollar is the beginning of Wave 5 higher, which should carry to at least 106.  Read more...

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