US Dollar Daily Chart Rally Review

What we have on the daily chart is a vertical move, that could be the exhaustion wave, of a counter rally. The question is, if another wave 3-4-5 will still happen or if the US dollar starts to head south again?  Our Canadian dollar also took a big swan dive in the last few days, which just confirms the inverse relationship to the US dollar.   When the US dollar decides to turn down, then our CAD should start to turn up.

Let’s say that I have at least 3 possible tops in the larger degree, and that a zigzag decline is still realistic. This 4th wave rally can turn, and produce yet another long extension, before we get to the “A” wave position.  It  would be great if the US dollar ends on wave 1 in Intermediate degree.  The big question is, if the US dollar is in a big bear market or in just another bull market correction? Not until the US dollar shows us, that a zigzag of a bigger degree has formed, can I turn bullish on the USD.

The extreme bullish sentiment that the public signaled to us, on that late 2016 peak has not matched any counter bearish feeling of the same intensity. In 2008 the majority hated the US dollar, and in 2016 they just loved it again, so we still have a missing time period when the majority hates the US dollar again.

Any bearish mood we’ve had recently, is not enough for a new bull market to bounce from. Markets always behaved the opposite of what fundamentals may be suggest at that time.  In the commodity world, swings are far more dramatic, due to the massive leverage built into them.