84.00 Proves Too Much for the Dollar
Tuesday could be considered a sort of “groundhog day” for the Dollar. It seems that in the effort to rally up through a bundle of significant resistance, the Dollar saw its own shadow and retreated.
The rally that began on the 5th of December with the squat bodied candle and low at 82.24 came face to face with 83.00 and with a slight retracement was able to break above that “00” level so it should be to surprise that yesterday 84.00 was not broken on the first try. In fact the attempt left yet another squat bodied candle, much more like a doji, and a high at 84.22.
With the Wave acting as resistance and the understanding that as long as prices are below it the Dollar it is on the “weak side” of the Wave, there has been little reason to think long-term bullish on the Dollar. Now remember that this is off the daily chart and there have been plenty of Dollar-strength plays off intraday charts. And just like the daily, as these intraday charts met with 84.00 there is no assuming that prices will continue higher without some resistance.
The intraday charts, like the 30 minute, leveled out to a three o’clock Wave signaling consolidation between the 84.22 and the 83.85 low — which eventually gave way to lower prices. Currently as prices are heading back down towards 83.00, there will be some support. Don’t be surprise if the “00” is broken and price rally form the 82.88-82.89 level as that is where prices found support on 12th and 13th on the daily chart.
The main idea to keep in the mind is that these bounces are simply corrections within the downtrend until prices can trade above the Wave and be considered a reversal. For now, 84.00 is still that reversal level.
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