Dollar Futures reveal viability of a very common pattern.
I have gone through every trick I know trying to settle on analysis for the dollar. Let's be honest, the past year and a half have been nothing but squirrelly, sideways movement that appears to go nowhere and do nothing. In fact, we are basically sitting at the average price over that time period. SO, how should we read this? Well, this is how I read it...
Over the past 1 year and 7 months, price has arrived at the same price: Sideways movement, like a consolidation, and at the end of a long move up, counting off of the May 2011 low. The move from 2011 appears complete, from a Elliot wave (read: structural) standpoint, and a Fib (read: levels) standpoint. From a strength standpoint, however, the September 2022 peak ended on the daily chart with continuing bullish divergence WITHIN THE WAVE 5. I call it a wave 5 because although its internal strength remained bullish, all peak readings indicated bearish divergence off of the March 2015 wave 3 of 3 top.
This line of analysis leads me to believe that we have, at the very least, the unfinished business of generating more negative, bearish divergence prior to anymore notable downside. Since, as I mentioned, Fib targets have been fully satisfied, meaning higher highs are unlikely, we may be gearing up for a strong move up. A move with outsized strength that fails to reach new highs, thereby creating hidden bearish divergence, since our high was not technically fully bearish.
In simplest terms, this appears to be consolidation at the end of a decade of bullish price action, which is bullish. Most technicals "technically" point us down, and the same goes for fundamentals, but there are irregularities in these metrics that point us up. Pattern, Strength, and Levels analysis give us plenty of room to the upside to finish this bull run, so long as we stay under 114.778, assuming a strong move, OR move up on weakness with only marginal new highs.
Conclusion: BULLISH.
Over the past 1 year and 7 months, price has arrived at the same price: Sideways movement, like a consolidation, and at the end of a long move up, counting off of the May 2011 low. The move from 2011 appears complete, from a Elliot wave (read: structural) standpoint, and a Fib (read: levels) standpoint. From a strength standpoint, however, the September 2022 peak ended on the daily chart with continuing bullish divergence WITHIN THE WAVE 5. I call it a wave 5 because although its internal strength remained bullish, all peak readings indicated bearish divergence off of the March 2015 wave 3 of 3 top.
This line of analysis leads me to believe that we have, at the very least, the unfinished business of generating more negative, bearish divergence prior to anymore notable downside. Since, as I mentioned, Fib targets have been fully satisfied, meaning higher highs are unlikely, we may be gearing up for a strong move up. A move with outsized strength that fails to reach new highs, thereby creating hidden bearish divergence, since our high was not technically fully bearish.
In simplest terms, this appears to be consolidation at the end of a decade of bullish price action, which is bullish. Most technicals "technically" point us down, and the same goes for fundamentals, but there are irregularities in these metrics that point us up. Pattern, Strength, and Levels analysis give us plenty of room to the upside to finish this bull run, so long as we stay under 114.778, assuming a strong move, OR move up on weakness with only marginal new highs.
Conclusion: BULLISH.
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