Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

US Dollar Downtrend into March 2008

Currencies / US Dollar Sep 19, 2007 - 10:33 AM GMT

By: David_Petch

Currencies Morning all, I have looked at the USD and there are many uncertainties about how things unfold. There are some clues presented that suggest the new course the USD is likely to ensue over the course of the next 2 years. The dollar failing to have any resistance on the path below 80 required acceptance that the USD was going below 80. If a triangle is still forming, it is going to have a descending angle to it, which poses very bearish upon its resolution (still mid to late 2009).


Numerous Fibonacci time extensions of various waves are shown on the chart, with dates clustering around early November and various dates in December. The USD can be expected to show weakness for at least 2-3 more months as best that I can determine. The lower Bollinger bands are in a setup for a continuation of the decline and as of this AM, the USD passed through the lower 55 MA BB. Short-term stochastics have the %K beneath the %D, with no sign of a crossover. The extreme weakness in the dollar will become more evident by time Figure 4 is presented, for those in doubt (not that there is likely to be any).

Figure 1

Red lines on the right hand side represent Fibonacci price projections of the downward trending price action of various waves projected off their subsequent partial retracements. Areas of line overlap form Fib clusters, which indicate important support/resistance levels. A Babson channel was drawn to illustrate the channeling action of the USD from October 2006 to present. The 79.42 Fib level was taken out, strongly suggestive the USD is going to go back down to long term support around 77. There is a Fib level at 77.9 and another just above 77.0. The angle of descent is shown if Figure 4 and must occur if the labeling scheme presented is accurate. Full term stochastics have the %K beneath the %D, with no signs of a crossover. The %K has at least 6-8 weeks of downside, but is likely to be extended further. The fashion the dollar has been channeling suggests a rapid decline to the 76-77 area at present and must occur before the end of March 2008. Should the bottom not be in by the end of March 2008, then the Elliott Wave count presented for wave [B] (a flat ( 3-3-5 ) would become a double combination.

Figure 2

The long-term Elliott Wave chart of the USD index is shown below, with Fibonacci time extensions of the initial decline shown at the top of the chart and Fib price projections of the decline projected off the April 2006 termination point. The next Fib support on the weekly chart is 74.6, so if the 76-77 area gives out, the USD is in new territory and this will represent the next natural level of support (the next level is at 70). The implications for the dollar bottoming no later than March 2008 are more important on the weekly chart than the daily charts. The chart is presented in log format because the confirmed weakness in the dollar dictates a longer-term range is shown to cover all possibilities.

To break out of the channel, the USD is required to complete wave [B] by the end of March 2008. If it fails to significantly rebound in a wave [C], then the triangle scenario will likely become invalidated and the USD has a trip to the lower line of the channel (which is around 65-70). Full stochastics have the %K beneath the %D, with no sign of a crossover or internal strength. The triangle shown (red trend lines with the thought path denoted in green) represents the best case scenario for the dollar over the course of the next 2 years. This non-limiting triangle will have reverse alternation between waves [B] and [D]. Let's hope the triangle structure holds and the angle of the apex does not tip lower. The long-term target for the USD around 2011/2012 is likely to be somewhere between 50 and 60.

Figure 3

The long-term Elliott Wave chart of the USD index is shown below, with the thought pattern denoted in green. For this count to be accurate, the USD must complete the pattern shown below between the 76-77 area no later than March 2008, in a choppy type of fashion presented below. Wave (C ) is labeled as a terminal impulse (3-3-3-3-3 internal structure) and the 2-4 trend line MUST be broken after completion of wave 5, something that has not yet occurred. If the USD makes a moon shot for 76-77 over the course of the next month with no resistance, then the count I have will require tweaking.

Figure 4

Bernanke was in Europe trying to get the EU to lower interest rates in desperation to try and find some support for the dollar. At some point, there will be buyers of US real estate from Europe and other countries, which will help to stabilize the US dollar. One other count possible for wave [B] is that the initial portion is A-B-C.(W), terminating where 1 is located. Point 2 becomes wave (X) and the move at present is wave (Y). I hope that the count and alternative counts presented make sense. Wave counts are governed by rules in pattern, time, complexity and wave structure. Failure of one of these components will require the labeling scheme to be altered to fit the data.

By David Petch

http://www.treasurechests.info

Copyright © 2007 treasurechests.info Inc. All rights reserved.

If this is the kind of analysis you are looking for, we invite you to visit our newly improved web site and discover more about how our service can help you in not only this regard, but on higher level aid you in achieving your financial goals. For your information, our newly reconstructed site includes such improvements as automated subscriptions, improvements to trend identifying / professionally annotated charts, to the more detailed quote pages exclusively designed for independent investors who like to stay on top of things. Here, in addition to improving our advisory service, our aim is to also provide a resource center, one where you have access to well presented 'key' information concerning the markets we cover.

On top of this, and in relation to identifying value based opportunities in the energy, base metals, and precious metals sectors, all of which should benefit handsomely as increasing numbers of investors recognize their present investments are not keeping pace with actual inflation, we are currently covering 62 stocks (and growing) within our portfolios . Again, this is another good reason to drop by and check us out.

And if you have any questions, comments, or criticisms regarding the above, please feel free to drop us a line . We very much enjoy hearing from you on these matters, although we may not be able to respond back directly, so please do not be disappointed if this is the case.

Treasure Chests is a market timing service specializing in value-based position trading in the precious metals and equity markets with an orientation geared to identifying intermediate-term swing trading opportunities. Specific opportunities are identified utilizing a combination of fundamental, technical, and inter-market analysis. This style of investing has proven very successful for wealthy and sophisticated investors, as it reduces risk and enhances returns when the methodology is applied effectively. Those interested in discovering more about how the strategies described above can enhance your wealth should visit our web site at Treasure Chests .

Unless otherwise indicated, all materials on these pages are copyrighted by treasurechests.info Inc. No part of these pages, either text or image may be used for any purpose other than personal use. Therefore, reproduction, modification, storage in a retrieval system or retransmission, in any form or by any means, electronic, mechanical or otherwise, for reasons other than personal use, is strictly prohibited without prior written permission.

Disclaimer: The above is a matter of opinion and is not intended as investment advice. Information and analysis above are derived from sources and utilizing methods believed reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Comments within the text should not be construed as specific recommendations to buy or sell securities. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities as we are not registered brokers or advisors. Certain statements included herein may constitute "forward-looking statements" with the meaning of certain securities legislative measures. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the above mentioned companies, and / or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Do your own due diligence.

David Petch Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Joseph Cuce
03 Mar 08, 03:16
Exchange Euro for $'s ?

Should I convert my Euros to Dollars this week. I have over 100,000 euros. Then wait until the $ is stronger again to make some profit?


Post Comment

Only logged in users are allowed to post comments. Register/ Log in