It’s obvious that we see the US dollar in a bullish phase. Technically, it would be called a bear market rally if we believe that more downside is still to come.
Otherwise, we just assume that the US dollar bear market is over and the great USD bull market will resume. The horizontal line connects at least 7 points, which can give the US dollar rally reason to pause or even run out of power! I will be looking for a wave 2 top in Minor degree with the trend line being well within the previous 4th wave of one lesser degree. Any wave 2 rally is not limited by any means to stop dead at the trend line above as %60-%70 percent rallies can and do take place. In short, the general guideline for previous 4th wave reversal might not mean anything.
Fighting against the bigger trend can take more time than normal, so we have to have patience as I believe that the US dollar still has a huge bear market to show us. This USD rally is keeping a lid on gold and silver prices and it could still force a temporary drop in the price of gold and gold stocks.
The Euro is also crashing, and our CAD seems to want to take a rest from getting beat up. US Dollar COT reports do not show that both types of traders are in radical positions which gives the US dollar a bit of flexibility how high it can go.