US Dollar: Still Heading North

This could be the first chart where I show that we could be in a Primary degree run already.  Trying different degree levels is important as the USD could make a swan dive trashing the bottom trend line.

Turning real bearish too early doesn’t work as this choppy trend could just frustrate us to no end. The gold bulls sure would get a kick if the USD suddenly imploded, and the EURO started to soar again.

2008 was a major bottom for the US dollar and I think it’s bullish run is far from over, corrections notwithstanding.

The US dollar has very good solar cycle connections as the 2011 and 2014 lows match the two peaks of solar cycle 24. Even the 2008 USD bottom matches solar cycle 24 so it is next to impossible to say that it was just a lucky coincidental occurrence.

When solar cycle 25 arrives will it send stocks and the US dollar soaring again? All the indicators on the planet will not work if we ignore the power of the sun and its 11-12-year cycles.  Talk of a recession is endless which can happen as one solar cycle ends and the next cycle starts.

From my perspective solar cycle, 25 will become the recession killer just like 2008-2009.

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US Dollar Crash And Rally Review

In my last USD posting, I described that the USD dollar could be in a diagonal 4th wave and sure enough, the USD seems to be heading up again. It won’t be a smooth ride for a 5th wave because this is a world filled with diagonal wave structures.

I would love to see the USD breakout to new record highs even by the slimmest of margins but “Time” will have the final word!

Just inverse the chart above and it will look like the Euro which should produce another record low.

Gold and the USD have both been bullish today so we could run into more situations like this in the future.

The commercials are net short by a wide margin which does not seem to slow the USD bullish phase down any,  at this time.

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US Dollar Intraday Gyrations Review

I may have to drop this wave count degree level down by one, and I also doubled the “Custom Bars” to 1000. During July I thought I would get a set of 5 waves but now even an extreme diagonal 4th wave is being pushed to the extreme.

Friday the USD dropped like a rock but at the same time we could end up with a huge open gap! The zigzag bullish run could be a bear rally and usually, any Elliott Wave bear market rally gets retraced by 100% or more.

In order for gold to keep soaring the USD has to backslide. Combine that with still horrible commercial hedger positions, we could see the USD twist and turn, up or down!

For now, the trend still seems down as some key support price levels could get trashed.

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Quick Canadian Dollar Bullish Update

This daily chart shows that our dollar is in a bullish phase which I’m counting as a bear market rally.  Zigzags and flats end with 5 wave runs and in this case, only wave 1-2 has shown itself.

Since the early 2019 bottom, we also got a higher low which is a sign of a conventional bull market.  Just because some asset class goes up doesn’t mean it’s in a bull market.

This rally sure can fit into a bearish rally and we need to complete a full set of 3-4-5 waves before I turn bearish again.

I’m not going to give you a price forecast but diagonal 4th wave rallies can come back so far that we can swear a bull market has arrived.  A retracement back to the wave 2 top can happen but time must do its thing.

For now, I will keep the decline as a 5th wave decline but I’m already looking at alternate wave counts.

Short term I’m very bullish on our CAD but longer-term could be a different story.

 

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US Dollar Intraday Rally Update

This bullish run started June 25 and is still going as I post.  Even though the USD can fit into a 5 wave sequence we can get a 5th wave extension that may still surprise us. Moves like this always affect the price of gold which crashed this morning as well. I bet if you searched analyst reports why the US dollar exploded they would all come up with a different set of fundamentals reasons. Even the majority of wave analysts always inject some fundamental reasoning into their wave counts but the biggest fundamental of human emotions they seem to ignore.

Mini panic buying or selling is an emotional thing and in this case, short sellers got caught in traps of their own making. There are no daily trading limits in commodities so moves can move dramatically without obvious counter-rallies.

US stocks and the gold price crashed together this morning which also happened during the 2008 crash.

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Canadian Dollar Daily Chart Review

Even though Canada is going into a recession, the CAD is moving like it’s over already.   I made a few changes in the count down but I know they are diagonal wave structures.

In the end, I don’t think the CAD bear market is finished until a 4th wave rally has been completely retraced. We will find out if the top trend line will hold and we may even be in a “C” wave of a triangle.  If so we need two more zigzags to play out.

The scary part is that these 4th waves can also blast up taking us to wave 2. That scenario is not on my wishlist but with this crazy market, “Crazy” seems to be the new normal.

Social media has turned against our prime minister and no amount of bull shit “Tweets” will bring him back. If Canadians vote Justin Trudeau back again, it will surprise me to no end.

Besides the elections, we have solar cycle 24 still to contend with by the 2020 time frame.

 

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Canadian Dollar Monthly Chart Review

Our Canadian dollar is also in the US dollar basket and always has been a good indicator to watch. I moved the wave 3 over to the 2011 peak which also matches the first peak of solar cycle 24. They can spew out all sorts of fundamental news to explain any move on the charts, but ask them about the fundamentals in 2000 chances are good they have no clue or can’t remember.

Back in 2000, it was the peak of solar cycle 23 and now we are facing a potential bottom with the ending of solar cycle 24.  It could take the start of solar cycle 25 before the CAD turns bullish again.  No matter how much we ignore the sun, we are under its magic spell!  Solar cycles have a huge impact on business cycles and commodity prices and they are constantly changing our climate as well.

In the last few years, the Canadian dollar has formed an obvious inverted zigzag which is a bear market rally. The present 5th wave decline contains diagonal waves which are pretty common in 5th wave positions.

Our oil industry has been destroyed by the people that want to bring down the entire fossil fuel industry. 80% of all our food is delivered with fossil fuels and if that support was dramatically removed you would see massive starvation in a short period of time and our forests would get decimated just to keep us warm. We need electricity just to keep the internet running mining Bitcoins, never mind trying to get 5G up and running.

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Euro Weekly Chart Review

The Euro is inside the US dollar basket. The grinding bear market that the Euro has been in since the 2008 top are diagonal waves.  The Euro is just about a perfect inverse pattern to what the USD is so if your expecting gold to make a huge rally then you must expect the Euro to soar as well.

The Euro is in a rally right now but it is also near creating another death cross.  The 2018 peak is a potential 4th wave peak or bear market rally so if that is a true position then the entire 2016-2018 rally will still get retraced.

This could take until the solar cycle ends and solar cycle 25 starts as solar cycles have a huge impact on business cycles and prices of commodities. The short version is that solar cycle 25 could be very bullish for the Euro, but is still 1-2 years away.

The commercial hedgers are net long but not by much, while the speculators have a strong short position.

The Primary degree wave 2 top in 2011 matched the first peak in solar cycle 24 which the disbelievers just think is coincidental.  There is no question in my mind that the solar cycles have on earthlings as the 2009 bull market has demonstrated.

Short term the Euro could still be bullish but in time it should resume its bearish phase.

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US Dollar Intraday Impending Rally?

In the last few months, the US dollar has made steep drops 3 times already giving gold the extra push to new highs to the $1411 price level.

The only way I can count this out is from a diagonal perspective.

Sometimes there is no obvious zigzag down the 5th wave which would bring a bottom on much sooner than we think.

I may have to knock my degree down one level, as this diagonal decline may be part of an expanded top.

I believe that the US dollar is in a corrective phase and sooner or later the USD bulls will return. On a daily chart, we have many previous 4th wave bottoms that will supply support.

Many think that the US dollar is in a bear market rally but I think the USD is in a much bigger bull market than what the majority think at this time.

Last week the commercials hedgers removed long positions and at the same time added to their short positions which I think was a bearish move. During the week this could all start to change again.

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US Dollar Daily Chart Review:

Since the 2018 bottom (wave 4) the US dollar has been in a bullish phase and at this point, I still can’t see a major trend reversal in the making.  With the entire world trying to destroy the US dollar it still looks like it wants to keep pushing higher.

Since the 2019 bottom, the US dollar has produced an overlapping pattern that frankly has been a real challenge to sort out.  2019 has turned into a diagonal nightmare because diagonal waves can be mistaken for a bearish rally it is easy to come up with a wave count where the US dollar is going to crash.

I’ve mentioned it many times but I think the US dollar is in a much bigger bull market that we can imagine and no amount of fundamental reasoning can change its direction until it is ready to do so. The real bottom with the US dollar was back in 2008 when the entire world thought the USD had died and was advised to get out of the USD and into gold.

All the gold bugs are eager to see the US dollar crash again and it may happen, as any bull market needs good healthy corrections to stay alive.

I’m sure my bullish wave counts are going against the US dollar bears and at one point the commercial hedgers shifted to a massive net short position that I thought would finish the US dollar bull market.

Last week the commercial hedgers made a very bullish move as they added 2597 contracts to their long side. Don’t get me wrong as the commercials are still net short by a large margin.

Our last bottom with the US dollar was about May 7, 2019, which could be a bottom for another leg up. Any bullish move should push the US dollar to a new record high even if it’s only by a very slim margin.

Commercials turned very bearish towards our CAD and gold last week, which also helps my bullish case.

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Quick Intraday US Dollar Update

For the last 6 weeks, the US dollar has seen some wild moves which also produces some spikes that don’t show up with a line type setting.  The US Dollar couldn’t stand up any longer and looks like another correction is playing out.

Still, the US dollar is not going to dive into a bear market pushing the price of gold much higher, at least not yet!

The trade war has been going on for a long time already so the USD could have imploded many times already, but so far it has refused to do so, except for corrections.

I will remain bullish on the USD but the commercial hedgers may not see it that way in tonight’s COT reports.

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Crashing Australian Dollar: Monthly Chart Update

Since August 2011 the Australian dollar has been in a bear market. The big counter rallies can fool us into thinking the Australian bear market is over.  The 2011 AUD peak and our CAD both ended as solar cycle 24 was finishing.

This is not something coincidental, as the sun cycles impact all currencies. In the last year or so we had a sideways rally that many figured was the start of a new bull market. I was raked over the coals about remaining bearish to the AUD and CAD.

Reality is starting to set in where this 4th wave rally is close to being completely retraced at the 68 cent price level, which is not too far away.

A wild erroneous spike still shows up but other settings do not confirm this spike, so I ignore them. No doubt about it, the AUD decline is not your picture perfect 5 wave impulse as they are rare in anything commodities related.

At 60 cents the Australian dollar would be getting close to the 2008 crash bottom which ended solar cycle 23.  The only difference between then and now is that the solar cycle number increased by one.

Australian dollar commercial positions are stacked to a net long position which is a bullish indicator but they can remain that way for extended periods of time.

I believe that the start of solar cycle 25 is going to be positive for both of our currencies but that knowledge means little if we have never experienced the mood change that solar cycles bring.

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Canadian Dollar Daily Chart Update

The chart above shows how bullish the commercial hedgers are, so working a bearish wave count against their bearish outlook is like playing “Chicken”, so we have to be aware that a potential rally could surprise us.

Our Cad futures chart has been grinding down for years since the 2017 peak,  which I believe was an inverted zigzag. The US Dollar produced the same type of choppy waves in a 5th wave decline and at that time the USD commercials were also net long by a wide margin.

This decline is part of the bear market so the CAD can still grind its way to the .68 cent price level or even lower. There are no daily trading limits in commodities futures so there is nothing to stop any move until it exhausts itself. Our CAD was repelled in 2011 by solar cycle 24s, second peak.

The end of solar cycle 24 is pulling the CAD down, but when solar cycle 25 starts up, our CAD should soar right along with it.

 

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US Dollar Intraday: Impending Correction?

This is just a quick update and may not last long enough before the digital paint even has a chance to dry.  There is a chance that a correction is still in progress and that the US dollar could make a deep decline this week.

Nothing but a 100% retracement would satisfy or help confirm the bearish wave count above. Any intraday decline of the USD could also send gold on a bullish move as fear attacks the stock bulls.  Any push to new US dollar record highs would send this wave count to the digital “Bone Yard” very quick.

I look for long spikes pointing down as they tend to be corrective “C” waves coming to an end.

 

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US Daily Chart Bull Market Update

In February 2018 the US dollar crash came to an end, which I believe to be the end of a correction in this ongoing bull market. The big US dollar bear market came to an end in 2008 when it exploded in price.

Many contrarians were warning us that the USD could turn very bullish as all the US dollar bears were in a massive bear trap.

2008 wasn’t just a temporary bottom it was a “Bear Mania” bottom.

I know there is no such thing, but I’m trying to make a strong point that “Manias” work both ways. 2008 was also a huge 23-year bear market bottom with the shape of a falling wedge.

Since then the USD has spawned a major bull market which could last decades but that will produce corrections that many believe will be the start of a new bear market.

On the daily chart above, the 2019 bullish US move has some wild moves in it that need more time to clear up. At this time I will count them as a diagonal wave structure.

I will not be a “Happy Wave Counting Camper” until the US dollar soars past the 103.650 price level, with 120 being the ultimate price target.

A month or so ago the commercial hedgers dumped massive amounts of long positions which did not support my bullish outlook anymore.

With the US in the largest trade war in its history, you would figure that the US dollar would implode. Last week commercials took away 1316 short positions and even added 233 contracts to their long positions. I see that as a bullish development and to some extent, supports my bullish wave counts.

The Smoot–Hawley Tariff Act signed in 1930 killed the stock market in 1929, but stocks have not reacted to our present trade war that much. How long that will last may just be the best guess scenario at this time.

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US Dollar Intraday Update

Markets can turn at the beginning, middle, or end of a month most of the time.  The USD had a bearish relapse this month but it looks like a corrective zigzag may have completed.

It also means that the USD can soar much higher.  The US dollar is in a bull market which started in 2008, but this bull market is also producing a large number of overlapping waves. which work best as diagonal waves.

The USD may not breakout and even give us another leg down but in the bigger picture, this US Dollar is in a bull market even though commercials are heavy net short.

Last week commercial net short positions had a ratio of 40:1, which I consider extreme. Having a bullish wave count with those conditions in place is like two cars playing “Chicken” on the freeway!  Last week the commercials added contracts to their long positions and took away 424 contracts from their short positions. This gives a clue that commercials had a bullish outlook last week!

It may be hard to realize but the USD has been in a major bull market since the 2008 bottom which I documented very well. The thing is the younger generation today has no clue how emotional that time period was.

Emotions of a herd only last for so long after which they disappear. It is the numbers and letters of the EWP that capture these emotions. You heard about the “Message in a Bottle”, well the EWP is all about “Emotions in a Bottle”.

Even with the trade war being in full swing, the USD keeps making bullish progress.

On the monthly charts, the golden cross has already happened, while on the weekly charts the moving averages are on the verge of creating another golden cross as well.  The moving averages are giving bullish signals so we have to see who wins by the end of this month.

The full moon is coming up this weekend, so that can produce a turning next week as well.

 

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Canadian Dollar Weekly Chart Update

Even though the commercial hedgers are net long the Canadian Dollar by a 2:1 ratio, I will keep working our CAD with a bearish outlook.  When the Canadian dollar hit its peak in 2011 its price was repelled to the downside with the first peak in solar cycle 24. Many other commodities also imploded notably all gold related assets.

This provided the push to the 2016 bottom, after which the CAD exploded violently. Not just once but twice with the same looking pattern.

This all can be taken as a bullish sign, but I see an inverted zigzag which has not completed. From the 2017 peak, the CAD has declined with overlapping waves, which helps in thinking we are in a 5th wave decline.

To help confirm that the CAD is still in a bear market rally, the 73 cent price level will not hold, and at best we will get a huge double bottom at the 68 cent price level.  This may take until late 2020 to play out but by then we could see the arrival of solar cycle 25.

The world is in a war against the use of fossil fuels, the likes we have never experienced before. In the last 2-3 years, the language has changed to the “War On Climate Change”. Global warming wording has disappeared from mainstream media headlines, replaced by just “Climate Change”.

The world is all in a panic to stop the climate from changing, which is actually a war on our sun!  Good luck with that folks, as I have never seen anyone win betting against the sun.

We may still get a bullish push with the CAD but in the near term, support will not hold.

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Euro 2000-2019 Review

 

When the Euro hit a major bottom in 2000 it coincided well with the peak of solar cycle 23. The Euro was repelled to the upside during the entire length of the down phase of solar cycle 23.  The Euro gave us close to a 9 year bullish phase which “Coincidently” ended in early 2009.  After 2009 the Euro started a bearish decline which coincided with the two peaks of solar cycle 24. (2011 and 2014) The decline of solar cycle 24 repelled the Euro to the downside or another way of looking at it is that the solar cycle is drawing prices to it like a magnet.

I would expect that the upswing of solar cycle 25 could send the Euro into another bullish phase, which still may take until late 2020 before that happens. It’s great for longer cycles but in the short term, a 5 wave sequence still seems to be rolling along.

I would be bullish as well if a long spike developed to the downside, which has not happened yet.

The commercials are betting on the bearish trend to continue as we can see they have now built up a very strong net long position. Of course, the speculators have gone the opposite direction as they have a bearish outlook for the Euro.

Any bearish wave count supports the speculators, but both parties can’t be right at the same time.

The gold bugs need for the Euro to explode, as it is in the USD basket and acts inverse to the USD.

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US Dollar Intraday Bull Market Update

After a stunning run, the US dollar has started to back-off again.  In my last update I had the US dollar in a diagonal wave count, but this time I looked for a cleaner impulse. The top trend line is based on the bottom support line, so the US dollar was still a bit shy of hitting it.

I think the USD is still in a bullish phase but corrections can seem like the return of the USD bear. The commercial hedgers have net short bearish positions, so any bullish wave count I have is fighting headwinds.

Of course, hedgers can change positions very fast, but we have to wait until Friday’s COT reports come out.

I wouldn’t want to see the US dollar slice through the bottom trend line, but it’s impossible to catch surprise moves most of the time.

 

 

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Canadian Dollar Daily Chart Bearish Update

It’s understandable that our Canadian dollar is taking a beating as another move south happened during the night. Our great visionary leaders creating the economic civil war on fossil fuels here in Canada is to blame.

Since the September 2017 wave 4 peaks the Canadian dollar has been in a steady bearish decline that is not a pure impulse, but a diagonal impulse as it is still a set of 5 waves.  It may sound silly or stupid but you could label this same daily chart 3-4 different ways.

A triangle (ABCDE) wave count would work as well as (WXYXZ).  The difference is that only one can travel to new record lows while the triangle and  (WXYXZ) can’t.

The January 2019 low is the low to beat, but the 68 cent price low would be ideal.  The commercial hedgers are still net long by a ratio of more than 2:1 and last week they added more long positions.

The speculators see the opposite as they are bearish by more than a 3:1 ratio. Both groups can’t be right in their directions so sooner or later one group will be proven wrong.  When one group realizes they are wrong, it can cause a mini panic.

Even then it doesn’t mean a major reversal of our CAD is guaranteed. The first low to beat would be the .732 cent price level with .68 cents being the ultimate goal.

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US Dollar Intraday Bullish Move Update

In the last few weeks and the turmoil in world events, the US dollar is very close to making new record bullish highs. This 97.100 price range is also producing potential resistance.  Will the USD keep on soaring or will it implode due to all the stories about how Russia, China, and Iran are buying gold to destroy the US dollar!  They can’t be buying gold, or they have stopped buying gold because gold has been crashing as the US dollar is soaring.

I won’t repeat any of the fundamentals as thousands of analysts have got that covered. I look at the COT reports and a month or so ago, the commercial hedgers removed a “Large” amount of long positions, with last weeks positions creating a net short ratio of 48.36:1.  In other words, commercial hedgers are bearish by a wide margin, but yet the USD is still going for record highs.

Looking for a bullish wave count under those conditions is like playing “Elliott Wave Count Chicken”, so how long this bullish push will keep going is a good guess at best.

The vertical spike last night would be enough for me to turn very bearish on the USD, but I can still see bullish wave counts developing.

Gold is reacting to the US dollar rally as expected, but its decline will also stop dead and reverse once the USD starts on a much bigger correction.

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US Dollar Intraday Bullish Phase Update.

On the 12th of April, the US dollar index seemed to have made a good bottom which may be the 4th wave of Minuette degree. It could take the rest of the month to play out but the full moon this Friday may change all that.

Looking for a bullish wave count in a world that is trying to kill the US dollar seems futile at best but that’s what markets do, as they act the opposite of what the majority always expect. Against all odds, the USD has turned bullish. Any 5th wave can extend blasting to new record highs and I’m sure we will get a heavy dose of diagonal wave structures as well.

It would be nice to see the USD above 97.700 but that could just be wishful thinking at this time. The commercials are not on the bullish side so any bullish wave count I have technically should not work.

 

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US Dollar Daily Chart Bullish Gyrations Update

In bear markets, it gets ugly as all the bad fundamental news become front page blog news. There is also a whole lot less cooperation as deals fall apart or governments make wild moves that reverberate around the world. It’s a mixed bag of news so the fundamentalists are getting conflicting news.

Yet with all that, the US dollar doesn’t want to die but is still making bullish progress. I stayed with my 4th wave bottom but the 5th wave could also be another zigzag. I have a set of overlapping waves that defies description except a diagonal. I have also seen these “C” waves explode and extend that also defies logic but happens regularly.

One reason the USD has not died just yet is that it is in a much bigger bull market than many of us do not understand.  It is also the main reason why gold and silver continue to underperform.

This is last Friday’s USD COT report and something wild did happen that was a rather rare event and that was that the commercial hedgers removed a big amount of long positions when they were net short already.

This turned into a 41.8:1 net short position which is a huge jump I have seen in all the years looking at COT reports.  It also puts my bullish wave count at odds with the commercials,  like I’m playing “Chicken” with who turns first.

I could see it if a big vertical spike was developing, but we’ve only had small spikes since early 2018.

Yes, the USD could make a sudden move south but with this pattern, it’s much harder to tell.

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Euro Weekly Chart Review

The Euro took a dip during the night further confirming a bearish mindset. I’m not exactly happy with this wave count as there is a bit of conflict here as the COT reports still have commercials being net long. Any big changes in COT positions are not posted yet. It takes the Saturday to look it all over for any changes. The USD acted bullish at the same time and gold pushed to $1320 before it backed off.

This short term Euro plunge could lead into a long spike which increases the chances a longer reversal is comming.

During the 2018 bearish phase, the Euro was extremely choppy which are classic diagonal wave structures, and they are still acting that way.

The golden cross is still in effect but that may not last too much longer after the 200-day MA gets sliced in two.

Brexit woes continue and survival of the Eurozone is also at risk as democratic countries are under constant threat of cyber attacks and debt traps.

Even though the Euro looks very bearish we should be very vigil for an unxepected reversal.

 

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US Dollar Daily Chart Review

From this perspective, I can sure show you a very bearish US dollar pattern as I have a group of overlapping waves that can’t make fit.  With a potential wedge and the right shoulder, the US dollar sure looks bearish. At least in the short term. The right shoulder will not hold if the USD is in a bigger bullish phase.

Tomorrow is also the full moon which can produce some amazing reversals but many turnings also happen closer to the end of a month, so the USD can remain bearish for another couple of weeks.

Commercials support a bearish stance right now, as they are net short by a margin of 10.9:1. Of course, the speculators have been chasing the US dollar bullish phase but their net long ratio would shrink as the US dollar declines some more.

A price drops down to the 94 price level would be one of my choices which would trash the bottom support line as well.

In the short term I’m bearish but longer term the US dollar could be in a bigger bull market that very few of us are expecting.  In 2008 the entire planet hated the US dollar, but yet look what happened! The US dollar soared while gold crashed a couple of hundred dollars. The USD has a 26-year falling wedge which can produce super bullish phases.

 

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Euro Intraday Downside Breakout Review

Has the Euro rally gone far enough? Just like the USD, we are dealing with a potential expanded pattern, except the trend is going the opposite way. Even though commercials are net long, they are not net long by very much just yet. This bearish phase is not starting to hit major COT resistance.

In some respect my wave counts are playing, “Chicken” with the COT reports and it’s just a matter time to see who blinks first!

The 4th wave rally in Minor degree ended at the top left of this chart and a full set of 5 waves in Minute degree still have to play out. Even though the decline looks stunted, it can extend dramatically when we least expect it.  Any move below the 1.120 price level will certainly confirm that this present rally is still a bear market rally.

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US Dollar Intraday Bull Market Update.

Some investors are looking for the US dollar to imploded due to the massive printing program they have done over the decades. Back in 2008, this bearish mania was at its record low from its 1985 peak. We were all warned over and over to get into gold and out of the US dollar, yet what happened was the exact opposite. Back in 2008 the USD exploded and has been in a bull market ever since.

This intraday chart is just a very small time period of this bull market, part of a 5 wave run in Minor degree. The 4th wave sure looks like it ended in January as the second low was a higher corrective low. The late January crash has been retraced, and at this time the USD sure seems like it wants to keep heading higher.

It would be nice to think that another wave 1 peak has completed in Minuette degree, but the commercials are still building bearish positions.

I would be very bearish on the US dollar but usually, any asset class will start to “Act” funny, before it reverses any strong trend, which the US dollar has not created just yet.  The Euro and our CAD have also made some bearish moves which should happen as they act inversely inside the US dollar basket.

I would love to see the US dollar break above the 97.711 price level as that would establish a new 2019 record high.

 

At this time the commercials have a net short ratio of 7.29:1 which is on the extreme side. I’ve seen worse so this can keep going for many weeks.  The speculators removed 1659 contracts of their long positions which means they got scared. Another way of looking at this is that my bullish wave count is playing “Chicken” with the commercials at this time. One thing that has not happened as well, is a strong vertical spike in the daily, weekly or monthly charts.

On the daily chart, the USD has found support at the 200-day MA and is still under the influence of a Golden Cross.

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British Pound 1985-2019 Review

 

If we look back to 1985 there should be no doubt that we can see that the British Pound had a huge single spike to the downside. 1985 was an important year for many of the currencies to make major turnings. All the currencies inside the USD index act inversely, so our wave counts have to do the same thing.  Thinking upside down with the wave principle has to be pretty normal if we want a decent wave count.  The last thing I have is a decent GBP wave count.  What I want and what the market is going to give me are two different things. If the GBP gets close to the 1985 bottom will it be at a Cycle degree wave 5 bottom?  I have my doubts at this time as the 2009 bottom may be the “A” wave in Primary degree location as well.

If a new low is going to happen then a plunging zigzag could be in progress. Below the commercials have been switching to the bullish side, while the speculators have done the opposite. Speculators are believing the bearish fundamental news, as they think this bearish trend is going to continue.

All fundamentals come in the form of “news” as the government shutdown clearly demonstrated to me.

 

These visual COT reports give us an idea as shorts and longs are clearly visible. The red lines are the long positions so I would be hesitant to take any position in the short term. Brexit remains the problem and until that gets resolved the GBP could be stuck in no man’s land for a little while longer.

Last week I still received one more Market Vane sentiment report that ranged between 34%-40% bulls, which are not some readings I can jump up and down about. Now if there were only 14% bulls in the survey, then that would be a different story.  I refuse to give any long drawn out fundamental commentary as 1000’s of other analysts are paid full time to do that. Every time the GBP makes a move analysts will jump in and find you a reason why it moved.

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Euro Monthly Chart Update

 

I’m sure the Eurozone is going to be bogged down with all sorts of fundamental problems which we here or read in the news.  The short version is “I don’t do fundamentals.”  Besides that, I don’t think a single analyst can give me a fundamental reason for each Intermediate degree or higher turning.  Forecasting a price crash to come, we know fundamentals will change, so does technical analysis change the fundamentals?

Just like the USD trend is up, the Euro is going the opposite way. Both these currencies need to travel the opposite way in order for gold to soar like they all say it will. After all gold is in a bull market right?  Since the 2008 peak, the Euro had 6 major bullish phases which all were completely retrace except for our present Euro rally.  Do you know how bullish everyone was on the Euro in 2008, yet the Euro turned and crashed?

2008 was also an important year as oil crashed as well.

Fundamentals are lagging indicators, and they mean little after every analyst on the planet is spouting the same gibberish.

Yes, the commercials are net long with their Euro positions, but they removed 5105 long contracts during the shutdown.  The speculators are bearish and last week they turned bullish as they added 9,229 contracts last week.

 

The COT report is a mixed bag and when there are no real extreme readings then I rely on my trend to give us a clue. I see the trend is still down on this monthly and even weekly charts. The wave 3-4 rally has an expanded pattern in it, which means a complete retracement to a new record low should happen. There are many expanded patterns that develop and to not look for them, will always give us a surprise.

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US Dollar Intraday Double Top!

Before the digital ink even dried from my previous US dollar posting, we just hit a double top this morning to within .003 of a point.  Now we have to wait and see if this is a bullish H&S or a bearish one.  I still have 3 degrees left but we may be close to a wave 4 type of correction.  I may also be jumping the gun here, as just a small spike has developed. This entire bullish phase has been running since the January 10th bottom with the February low being the secondary bottom as a higher low. I believe the US dollar is in a much bigger bull market than most of us expect, but where we are in this bull market is always the task at hand. The US dollar turned very bullish in 2008 and since then has been in a 5 wave run in Primary degree.

The Euro took a hit, as well as the other 5 in the USD basket!

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