DXY: Setting Up for Another Rally?
DXY - Daily
I have seen many begin to speak of the imminent collapse in the USD once again. And, while they may be right, I still believe we will meander in a larger degree 4th wave to confuse and confound most of the market for quite some time.
Not much has changed in our expectations in the DXY for quite some time. In fact, the market has been moving in almost textbook fashion within this corrective structure. So, there is not much more for me to update from prior weeks:
As we came into this year, the market was setting up to develop a larger degree 4th wave. And, thus far, the market has done well to follow through on our expectation. As you can see on our chart, my primary count has us in the purple b-wave for wave 4. Moreover, we have likely complete the (a) wave of that b-wave.
This means that after further downside is seen in the coming weeks to complete the (b) wave, we will likely see yet another rally in a (c) wave to complete the larger b-wave structure.
This past week, we experienced some of the expected further downside, which I am classifying as the a-wave of the (b) wave of the purple b-wave. This leads me to believe that we will see further downside in the coming week or two to complete the c-wave of (b).
As long as the DXY remains over the 90-92 support, and below 101, I am going to continue to look for the chop of a larger degree 4th wave. Should one of those regions break, then I will clearly have to adjust my larger degree perspective.
So, with the further downside seen this past week, we seem to be close to completing the (b) wave of the purple b-wave. That means that a (c) wave higher “should” be the next step in this longer term corrective pattern we have been tracking.
Now, if we are correct in our assessments, we may be setting up for another period of time where both the DXY and the metals rally together. Again, it is possible we can be wrong in this assessment, but both charts seem to be pointing higher over the next few weeks. So, until either of these charts break support (the 90-92 region for the DXY), I am going to be looking higher in both charts in the coming weeks. No doubt, should these set ups follow through to the upside together, it will continue to confuse and confound most of the market.