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.