The dollar has reversed sharply, averting a nerve-racking test of a long-term trendline that comes in this week at 92.13. DXY got no lower than 92.47 in the most recent down-cycle, and the last time it touched the trendline was three weeks ago at 91.70. The day’s rally was not powerful enough to lead bulls out of the woods. but it has somewhat lowered the odds of a major breakdown. Prospects would further improve if the nascent surge generates an impulse leg on the daily chart. That would require an explosive rally exceeding 96.40 at a minimum, but it wouldn’t be much of an impulse leg, since the external peak at that price (7/10/20) is small potatoes. On the less important hourly chart, it would take merely 94.11 to re-energize the short-term picture. That;s equal to an ‘external’ peak recorded on 9/30 on the way down. ______ UPDATE (Nov 1, 10:02 a.m.): Wouldn’t ya know it! The little devil topped at 94.10 last week — close, but no cigar. It looked primed to succeed nonetheless, although the pullback this will have required counts as a mild discouragement of the idea that the rally is destined for big things. ______ UPDATE (Nov 5, 9:27 p.m.): The rally has come suspiciously from two ticks above the in-your-face low at 92.47 recorded on 10/21. If it is not a strong one, look for a relapse to the 91.75 depths of September’s abyss. _____ UPDATE (Nov 8, 9:45 p.m.): The rally that got off to such a promising start on 9/1 has fizzled, so I am going to remove this tout to make room for more interesting fare. I will continue to track the dollar nevertheless with occasional posts, although not on the front page.
DXY – NYBOT Dollar Index (Last:92.83)