NYBOT Dollar Index

The latest bullish impulse leg on the weekly chart looks a bit ragged, but it deserves our earnest respect because it surpassed no fewer than four peaks, two of them 'external'.  The pullback is already sufficient to have recharged DXY for a thrust to as high as 83.90, but my gut feeling is that it will back-and-fill for another week or two before it gets traction.

The next crucial test for buyers lies at 82.99, a peak made on the way down in September. Its breach to the upside will be necessary to refresh the bullish impulsiveness of the daily chart. Success seems likely, given that there are so many uptrending ABC patterns acting simultaneously on this vehicle. However, a quick drop to 79.51 would be reason to rethink the bullish scenario, since that would generate the first bearish leg we've seen on the daily chart since mid-October.

A  feisty dollar has passed a key test Sunday night, gapping through an important peak at 81.44 recorded 13 months ago. The next impediment is 81.86, the Hidden Pivot target of the pattern shown. The target is sufficiently compelling that we should expect a tradable pullback from it, but if DXY gets past it easily, it would lend weight to the very bullish outlook we've taken on the dollar.

I've featured a chart of the Dollar Index in today's touts because it looks like it's about to pop.  Since this would have negative implications for the geopolitical world, I'll be monitoring this vehicle more closely in the days ahead.

A relatively docile dollar has allowed a broad swath of investables to meander for the last three weeks, but that could change if the Dollar Index pops above a key high at 81.44 recorded about 13 months ago.  DXY has been marking time since mid-December, but the relatively shallow pullbacks during that time suggest that it is in consolidation rather than distribution.   Moreover, a subtle sign that the implied thrust could happen soon can be seen in the bullishness of the hourly chart (see inset).  Yesterday's surge stalled precisely at the 80.33 midpoint resistance of the larger pattern, but if that number is exceeded today, dollar bears had better prepare to take flight, since the 'D' target to which it corresponds is 81.13. Exactly what a flight to the supposed safety of the dollar implies for the geopolitical world is impossible to say, but it is foreseeable nonetheless that the news will not be felicitous.

My technically bullish outlook for the dollar is none the worse for late November's swoon. That swoon, incidentally, bottomed to-the-tick at the p midpoint resistance-cum-support of the pattern shown. Its 'D sibling lies at 81.11, which if achieved would challenge key highs made a year ago.  I will have more to say about this in a commentary later this week, but for now you should be aware that a move above 80 could trigger a massive unwind of the dollar carry-trade.

The Dollar Index spent most of last week noodling above the 77.86 midpoint of a pattern reproduced here last week. If it's the consolidation it appears to be, the next big push is imminent and will take this vehicle to the 81.03 target flagged earlier.

The Dollar Index looks to be developing thrust for another run at 80, a prospect that would become an odds-on bet if buyers can propel this vehicle above the 77.62 midpoint resistance shown. Because that Hidden Pivot it is sandwiched between two external peaks, a pullback thereof could provide excellent cover for a camouflage long. The target would be 78.53, the midpoint's 'D' sibling. _______ UPDATE (November 18): Yesterday's high came within a few ticks of the target noted above. Let's prepare for more upside with a new one at 79.47 (Daily chart, A=74.72 on October 27 and B=77.68.)  Please note that a stall at 77.89 would validate a bigger-picture target at 81.03, although that number would not become an odds-on bet until such time as 77.89, the Hidden Pivot midpoint of A=73.53 (8/29), B=79.84, is surpassed.

Doug McLagan and I were on the same, bullish track when we posted, respectively, bullish touts for the December Dollar and the NYBOT Dollar Index. Note that this is corroborated by the improving outlook for the December T-Bond. Some may have given it up for dead, but it has moved within easy distance of a peak1 whose breach would create a powerful impulse leg on the hourly chart.