NYBOT Dollar Index

We can use a midpoint resistance at 81.85 as a minimum upside target for now. DXY got within 0.15 points of it yesterday, but if it should close above the resistance, that would signal more upside over the near term to at least 82.69.  The pattern is shown in the chart (inset) and looks clean enough to make the midpoint a reliable benchmark.

The futures surpassed our 82.17 target by just 0.07 points, then slid steeply into week's end.  That doesn't tell us much by itself, but we'll have a better idea of how much weakness may exist below the surface if and when DXY interacts with a Hidden Pivot correction target at 81.37.  Sunday night's low was holding 0.06 points above it, but it would take a reversal and a print today exceeding 82.03 to put bears on the run.

With a thrust to 82.25, the rally has slightly exceeded our 82.17 rally target.  That's a Hidden Pivot, and although I didn't expect it to work precisely, I did expect DXY to choke, sputter and wheeze somewhere very near it.  Actually, I'd be surprised if it proves to be a pushover, but we'll know soon enough. Let me therefore reiterate that dollar bears should dive for cover if DXY closes above the resistance.

Yesterday's spirited leap brought the Dollar Index within 0.14 points of the 82.17 rally target I flagged here yesterday.  It remains shortable, but you'll have to choose the vehicle and interpolate the target.  Since there is always the possibility the target will be exceeded, I'll note that a close above the target would be warning bears to dive for cover.

The corrective pullback missed my minimum target by a few hundredths of a point, but we shouldn't let that deter us from acknowledging the power and potential of the thrust that appears to be under way.  Just one small change is warranted:  My initial rally target was 82.09, but I have raised it to 82.17.  Shorts can use that number aggressively, but you'll need to interpolate it to fit your vehicle of choice.

Yesterday's thrust created a bullish impulse leg on the daily chart, although the requisite pullback will need to come down to at least 80.52 to recharge DXY for another rally. Once that occurs, the Dollar Index will be in position to push up to as high as 82.09 over the near term.

Friday's low at 79.69 fell a tad shy pf a 79.42 downside target that comes from the hourly chart. We'll make it our minimum objective for now, but any lower would be warning of a washout down to the February low at 78.68

Yesterday's rally may have seemed feisty, but it was actually no more than a gratuitous swing up to the approximate midpoint of the tedious range that has contained the Dollar Index for the last month. Is it distribution, or consolidation?  So far, it looks mildly like the latter, although the impulse leg that makes this so was subtle in that it failed to surpass a key high at 81.47 recorded last June.  It did exceed the required "internal" and "external" peaks, however, lending a camouflage quality to the rally as it appears on the weekly chart. Even so, the weekly chart cries out for more corrective action to create a nice, clean 'C' low for a launching pad.  If things play out that way, the most compelling rally target I am able to identify is the 83.33 midpoint of the pattern shown in the chart.

The daily chart is still bullish, since the last impulse leg to form, on February 18,  has yet to be negated by a trend leg going in the opposite direction. However, the fact that the dollar has been in a holding pattern for a month allows the suspicion that it is in a broad topping pattern. That's nothing that a relatively modest thrust to 81.48 wouldn't cure instantaneously, but until it happens, bets on a continuation of the rally begin in early December are speculative.