US Dollar Another Downside Breakout!

The US dollar is under pressure and it is right on the wire at the 89.400 price level. That’s only a hope skip and jump away from the Fibonacci 89 price level. I could paint you a very bearish US dollar picture just by flipping my trend lines at a very steep angle.  I’m sure there is more downside, but once it reaches the bottom trend line, we could be finishing a flat type correction.  This could ignite a “C” wave bullish run in the US dollar, and before you know it it will be over as we may be in a wave 2 rally.

The US dollar could fall well below my bottom trend line, but that would only make for a shorter “C” wave move.  It can still take all of next week for the USD to show its true colors in the short term.

Longer term the US is going down until everybody starts to hate the US dollar again. Besides that the commercial traders reports will become skewed. This time it’s the speculators that have joined in on the bearish side as they too have become net short by about a 1:1 ratio. Nothing to get excited about, but those numbers will shift and until the speculators have pushed their short positions to the extreme, we’re not going to get a huge bull market.

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