Some break points to observe

Here’s a potential count on the dollar index. How it relates to the EUR and GBP is to be seen.

So far the day on the currency markets has been a little dul. Well… be careful not to become too laid back as it is just such moments that lead to a sudden trend.

At this time the USD index is very unclear in it’s pattern. I had hoped it would show it’s colors sooner however it appears we may need to wait yet another day.

Cheers

Key level is still 81.50.

I’m labeling the chart with caution as I really don’t like the look of the C wave in wave 2.

However a a break of 81.50 to the upside is bullish and a break of 79.19 to the downside is bearish.

Cheers and have a good weekend.

We saw more USD strength today. There is now a 3 wave affair up so we are back at crossroads without further evidence.

I’m watching for a 4th and 5th wave. Which would then give way to a three wave (or combination) correction back to Fibonacci support. That juncture would be the new pivot point.

Have a great weekend.

Here’s a snap of the $/Index.

There appears to be 5 waves up. IF the structure of the correction happens in three waves (without a new low) and we then break to the upside, this will bolster the USD Bullish View.

As always; I caution that this in only one interpretation.

At this point the USD/Index is still pointing down.

In circumstances like this, the words of a colleague of mine run through my mind; “if it’s not going up… It’s still going down”.

It feels as if we are sitting on the edge of a turn with the COT sentiment at extremes and indicators highly oversold.  So I am being extremely cautious on direction either way at this point.

Wave 5 does seem to be missing, but forcasting its size is dificult in a highly leveraged market that is running at extremes.

Yesterday I wrote about how the current candles on a chart can potentially show sentiment in the market.

Technical trading is not a perfect science however the majority of the time engulfing candles are followed by continuation as evidenced in the last 12 hours or so on the USD Index. Of course this translates to the Dollar pairs for high probability trades.