So from expecting a correction the dollar rally goes on in the Chinese Yuan, ending up in an extension in wave C. Yesterday we closed at a new high above the wave 1 high, so wave 3 up maybe in progress. Above 61.8% at 6.68 we may go on to 78.6% at 6.805

usdcny 190718


USDAUD fell in 3 waves to rise again, so clearly the trend remains up after the breakout. A series of impulse waves marked as 1-2-1-2-1-2, as they overlap means a lot more upside as waves extend into 3-4-3-4-3-4-5. the next part of the fractal goes to 1.40 from support at 1.34

usdaud 180718

Dollar Index

In the Long short report I discussed the possibility of 100 on the dollar index, now we should either top out at 95.56 and turn down or take off to 100.10 above it to where C=A. This is the decisive point for the dollar rally to continue.

dxy 180718


The Euro is due to go back to 1.151 to complete wave e of a triangle at the end of wave 2 before wave 3 up can start. Can it fall below that? Not my view but be open to it since the RSI indicator on top is now near 46 and has a lot of room to go lower. Alternate counts would kick in below 1.151 [in green], in that scenario the Euro goes below 1.10. The near term trend is down for now.

euro 180718

Dollar Index

The dollar just fell in 3 waves and started to move up again. Taking a step back we redraw the ending pattern and we allow for wave e up to 95.50 in the next move higher for the dollar before looking for a peak again. Sentiment is back above 80% and rising so it should again hit an extreme at the highs.

dxy 120718


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