We can see some important reversal formation from Dollar bulls to Dollar bears with the price action seen in the past few sessions. Five waves up on euro, cable, down on dollar index and almost completed 5-wave structure on Aussie, gold and oil from the lows, definitely confirm a lower US dollar for the near-term price action. If things remain as they are till today’s market close, we will likely focus on Short dollar positions in the coming week. US stocks, also suggests a lower dollar in the near future, since a decline on the S&P500 from 1227 looks corrective.
Guest post by Gregor Horvat
Charts and Comments:
EUR/USD
Eur/Usd trend is changed, and is confirmed by a bullish price action which shows a clear five wave move from the most recent lows. As such, we really like the idea that some larger upward corrective recovery is underway, since five wave, impulse structure always shows a direction of a current trend. With this being said, this leg should be a wave A, with wave B pullback and then even higher wave C yet to come. Critical region of uptrend is now at 1.3447.
-Top of wave A could be near!
-We may look for Long opportunities once wave B appears.
S&P
Since the S&P reversed and moved above 1194 critical region, it’s clear that a decline from 1226 was only a complex corrective W-X-Y pull-back. We know that corrections are always against the larger trend, and as such, upward impulse structure may continue in the near future, towards and above 1207 and 1216 levels, if prices can remain above 1183.
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