NYBOT Dollar Index

The minor trend -- all we've got to work with so far -- projected to 75.92 at the close, and that would be enough to refresh the bullish impulse on the 30-minute chart. More important to our assessment of the strength behind this push, or lack thereof, is the way in which buyers handle the three peaks labeled in the accompanying chart.  An unpaused thrust past any pair of them would reinforce the assumption that the outlook for the  intermediate term (i.e., 3-5 weeks) had turned bullish.

We can use a Hidden Pivot at 74.36 as a minimum downside target over the near term.  This would allow for an upward retracement to its sibling midpoint, 75.59 (now resistance) with little damage to the intermediate-term bearish case. However, it would take a rally to just 75.19 to hint of a bullish reversal on the 2-minute chart. I have reproduced this chart so that you can see how very subtle this telltale is.

DXY would need to surpass the tiny peak at 76.71 shown in the chart to negate the impression that last week's rally, in failing to push above an October  12 high at 76.67, was suspiciously timid.  Failing that, a close above 76.52, regardless of whether 76.71 has been exceeded intraday, would also be quite bullish and would set up a push to at least 77.21, a Hidden Pivot. ______ UPDATE (2:40 p.m.): A nothing day for the dollar, characterized by randomly boring movement that tripped none of my alarms.

Hold the applause, you dollar fans, since DXY has failed on two  consecutive days to turn its presumptive dead-cat bounce into a genuine impulse leg on the daily chart. I've labeled the two peaks that the dollar should have exceeded if there is more than hot air driving it. We won't write it off yet, but the evidence is mounting that the bullish action, deep down, is gutless. Major trend reversals do NOT often begin with this kind of fumbling around.

The Dollar Index is stealing up on the 76.68 pivot I'd flagged as a bullish trigger, and the  action at that price will tell us what may lie in store.  If the rally is going to make a serious run at 80, however, it should be able to take on the two peaks shown in the chart without trouble. An uninterrupted thrust past both would affirm that this rally is more than just a flash-in-the-pan.  If the rally continues, exceeding yet another peak at 76.99 before day's end, that should send shorts diving for cover. _______ UPDATE (12:50 p.m. EDT):  The 76.68 HP benchmark prevented our getting overly excited about the dollar's rally. DXY made it only to 76.58, keeping us cautious ahead of today's nsaty selloff.

The 76.68 rally target flagged in today's commentary looks like a no-brainer on the 30-minute chart. The question is not whether DXY will get  there, but whether it will tear through it in an hour. My hunch is that it won't, but because the fate of the world's financial system hangs on the value of the dollar, we'll keep a close watch no matter what.

Your guess is as good as mine concerning DXY's next feint, but there is no doubting the bullish impulsiveness of yesterday's thrust. It cleared no fewer than three daunting "external" peaks, and that's why we should infer that this rally, finally, is the real McCoy. (But we'll nonetheless continue to verify each step of the way, since the dollar, after all,  is still fundamentally worthless -- a form of debt, not money.)

The Dollar Index continues to bounce very precisely from Hidden Pivot targets, but none of its sequential thrusts has been sufficient to suggest that a genuine turnaround is at hand. If DXY should fall anew, look for the next turn at exactly 74.36. Alternatively, a pop today exceeding 76.08, a look-to-the-left peak shown in the accompanying chart, would turn the short-term picture bullish.

The pogo-stick bounces from moderately important Hidden Pivot supports have not been able to sustain loft, hinting of still lower prices to come. As a result, although short-term lows have been precisely predictable, bottom-fishing has yielded gains only to scalpers.  The 72.93 target given here earlier is still where I think DXY will get traction, but here are two lesser pivots you can use in the meantime as minimum downside objectives:  74.36, and  73.79.  Either can be bottom-fished with a very tight stop-loss, but as always, a decisive breach will indicate more downside to the next.