US Dollar Daily Chart Bear Market Review

So far the US Dollar’s decline is pretty obvious, but what is never that obvious is to figure out exactly what type of a pattern we are going to get, and where we are within this pattern. 

At this time I will stick with the “D” wave top in Primary degree, but also a potential wave 3 top in Primary degree. They both have the same bullish mood, at record tops, but the “D” wave top will take us to new record lows, while a 4th wave decline will not.  Below the 89 price level the US dollar would be classified as a Diagonal 4th wave decline, but it still keeps the 4th wave scenario low on my list of probabilities.

92 is the first price level that has to get beat, in which we are not too far away. The decline in the last few days of last week, started out as a diagonal decline, which would slow down a bit due to the choppy nature of diagonal waves.  A good surprise would be that another  C5 wave from a zigzag has just started,  which would also push any short term support much lower. 

So far we have the makings of a classic Minor degree wave 3 extension with 2 back to back sets of 1-2 waves.

I looked over the USD COT report on Friday and the commercial traders still carry net short positions, but the spreads are shrinking and eventually the commercials will become net long. Until that happens this US dollar bear market is alive and well. 

Those that think that stocks are on some mythical permanent high, must also believe that the US dollar will still soar to new record highs. Well, the US Dollar has already been in a decline and stocks are on shaky ground, so this scenario is just a daydream. 

We would need a wave pattern that clearly shows us that a correction has taken place and after this “ABC” correction, the US dollar must soar to new record highs.  The US dollar does not have enough bears present to justify a major move to new record highs at this time. 

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