Friday, October 23, 2009
Dollar Satisfying Minimum Expectations for a Bottom
The dollar needed one more push to a new low to complete a possible ending diagonal 5 wave decline within a larger 5 wave decline within a larger wave C. Last night it did that, with a very slight new low and reversal. But the reaction after the new low in the USD/CHF has not been encouraging at all. The dollar rallied significantly against the british pound as you can see on the above 4hr chart on the right side, the GBP/USD dropped dramatically last night. I'd expect to see dollar pairs across the board with similar dollar strength in them. This leads me to beleive there is still some subdivisions of wave structure down needed to complete the dollar decline and form a bottom. But the british pound has probably made a top against the dollar, and 1.6700 should not be exceeded for a long time. But since the wave structure in the US dollar can count complete right now, new lows are not required.
Once I can confirm a dollar bottom and reversal, I'll post it here. Right now there are still great risk:reward opportunities for aggressive dollar bulls to get long right now with stops just past last night highs, just in case a dollar bottom is in fact in and just tried to sneak up on us on a lazy Friday.