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.