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Note: the following analysis is formulated as an assimilation of Fibonacci, DeMark, Elliott Wave and other technical indicators. It is offered as education and not intended as advice in any way.

Taking a look at the dollar index (DXY) now, you can see a fairly clear "5" wave pattern up from the lows registered on December 3rd (at 80.91) on an hourly chart. Recall our few days ago comment that this is what we wanted to see to get more comfortable with the potential that a MAJOR low was struck for the DXY last week.

Over the next few sessions we can reasonably expect the DXY to "correct" this impulsive move up by declining to Fibonacci support in the $81.40 to 82.30 area in a corrective fashion. Price cannot decline below that $80.91 level or else this call becomes invalidated.

As you listen to commentary on the dollar over the next few days and weeks, you can disregard the "causes" that the media and strategists/analysts ascribe to the likely rally in the USD. Almost certainly they will infer causation for the USD rally to any number of fantastical reasons that have nothing to do with the real reason why the buck is rallying: markets are non-linear (they progress and egress in proportion) and this market is likely undergoing a mean-reverting bounce to correct a nearly 3 year straight down decline.

My expectation (not advice) for the DXY, which no fundamental dollar strategist would ever concur with, of 98-102 in the next 1 to 1 1/2 years.

No positions in stocks mentioned.

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