NYBOT Dollar Index

One reason I think gold will soon come under renewed pressure is that the dollar appears to be consolidating for a nearly 2% rally to 85.16, a major Hidden Pivot resistance (see inset).  Notice how the top of an earlier rally that culminated on July 12 stalled precisely at 'D', giving way to the brief recharging that has sent DXY above it. It's impossible to say how long the correction will last, assuming it is one, but so far the pullback hasn't been sharp enough for us to pronounce the recent high a bull trap.  That would change if there's a nasty selloff in the next day or two, but otherwise we should infer that bulls are raring to go.

The Dollar Index is closing on an important target at 85.16 that can tell us whether it's about to go into a prolonged correction.  An easy move past the Hidden Pivot would imply that even larger, bullish patterns will continue to drive this vehicle to eventual highs above 90.  However, if bulls are about to get waylaid by a correction of perhaps three weeks or longer, DXY will either stall precisely at the pivot and drop back sharply, or plummet without having reached it at all. The latter scenario would be more bearish, but in any case we should minor DXY's progress toward 85.16 in the days ahead, since it is a most crucial threshold.

Someone mentioned in the chat room tonight that the dollar was bumping up against a trendline, presumably developing thrust for a breakout (see inset).  From a Hidden Pivot standpoint another perhaps more significant breakout price lies at 81.64, somewhat above the trendline's 80.35. It is the 'p' midpoint of the large pattern shown in the chart, with a 'D' target at 85.16. Breakouts aside, DXY's daily chart is already bullishly impulsive going back to a 78.10 point 'A' low recorded on 2/29.  The pattern projects to 81.24, so you could infer that the fireworks need only a match to light up the sky. Want to learn how to do this stuff yourself? Click here for information about the upcoming Hidden Pivot Webinar on June 6-7.

We don't ordinarily trade this vehicle, but if you play the currencies, you ought to be aware of the subtly bullish 'camouflage' pattern taking shape on the daily chart. There are many ways to trade it, including shorting the Euro when DXY's 'x' entry trigger is hit; or buying the June Dollar contract.

The weekly chart (see inset) takes some of the meaningless mayhem out of the technical picture, revealing at a glance that the Dollar Index's prospects remain unambiguously bullish. The target of the pattern shown is a very bullish 85.16, but it'll probably take a weekly close above the 81.63 midpoint to kick the rally into high gear.  You can learn to do this stuff yourself, probably more quickly than you might imagine. Click here.

The Dollar Index has been noodling around near the 79.98 midpoint resistance of a bullish pattern that projects to 81.30. There is a minor duel in evidence that gives bears a slight edge over the near term (i.e., the next 2-3 days), but the bigger picture remains quite bullish nonetheless. My hunch is that it will take a two-day close above 80 to light the fuse on this vehicle.

The Dollar Index has popped to within a penny of the 80.73 Hidden Pivot target shown, but as of around 2:30 a.m. it was too soon to tell whether buyers are going to pause for breath. If not, look for another short burst to 80.89, completing the larger pattern shown.  DXY will have to do a little better than that, however, exceeding the double-bar peak at 81.22 recorded on January 17, to demonstrate some staying power. Regardless, my intermediate-term outlook will remain in line with steadfastly bullish forecasts here and expectations of 90+.

The Dollar Index was just a split hair from breaking out above not only mid-February's important peak at 80.12, but also a series of smaller 'external' peaks recorded toward the end of January. The closest Hidden Pivot resistance, 80.36, lies in their midst, but DXY looks too pumped at the moment to stall for long. Once through this thicket, a crucial high at 81.78 recorded on January 13 would likely become magnetic, as would an equally important high at 83.56 from last August. If this bull run, begun nearly a year ago, is headed to 90 and above, we should start to see each new thrust on the hourly chart effortlessly create a new impulse leg.

A lot of effort went into yesterday's failure to surpass last Wednesday's 79.57 peak, implying the dollar is in no hurry to go places -- including, probably, significantly lower.   Dueling impulse legs on the hourly chart look sufficiently conflicted to put this vehicle into a state of tedium for perhaps another 3-4 days.  Regardless, a print at 79.80 would signal a revival of buying enthusiasm.