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That Dollar Low That Should Have Been…Should Be Today…

Published 08/30/2012, 02:26 AM
Arrrgghh… Tricked by a simple wriggle that seemed to point to a shallow correction… Instead we saw deeper corrections across EUR/USD, USD/CHF and EUR/JPY… It’s the latter that cannot take any further deeper correction that suggests to me that we’ll see follow-through today. That and the Dollar Index which should make a new low today also.

Further along the Dollar Index is probably worth watching as theoretically this low should not be broken. It can see a deep correction and retest the low we should see today but otherwise I think we’re just about done on the downside there.

Well, that tends to make life just a little more complicated given that I feel there is a risk of a new dollar low against the pound. Yesterday I had warned of the potential for the euro and swissie to possibly do the same but this would risk a lower Dollar Index. The only alternative I can think of is that we see a stronger reversal in the continentals but shallow in the pound followed by a deep correction only in the continentals while the pound makes a (probable) minor new high…Anyway, this love triangle + 1 is something to keep tracking for a while…


Perhaps even USD/JPY and EUR/JPY add to the mystery. The Cross made a very deep pullback yesterday but I still feel needs to make a final high before it reverses lower. Logical as long as the continental Europeans make new dollar lows… However, the prospect then is for losses and while
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USD/JPY made yet another push higher I can’t see this as anything but corrective so any stronger losses will also provide a minor drag on any reversal higher in the Dollar Index.

Just for today what I want to see is basically the same as yesterday… a final blip lower in the dollar before a larger reversal. At that time we can then see how the pound fares as it does appear to be the odd one out…

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