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US Dollar Update: Dollar Rally Is Just Getting Warmed Up


The US dollar bull market appears set to continue. The dollar index could approach 100 over the next year.

The dollar continues to track my roadmap from September 3 when I first suggested a massive rally was on the horizon. The most recent full update from October 31 (see US Dollar Update: A Bottom Is Looking Imminent) nailed the bottom perfectly to the day -- and if the dollar continues to track, then the dollar rally is about to accelerate even faster.

The dollar appears on the verge of entering a nested third wave advance, which should soon explode to the upside. I have updated the daily dollar chart to show the targets for wave (iii) of iii of (3).

Click to enlarge

If the short-term count is correct, the dollar may do a little backing and filling first, before launching higher in wave 3 of (iii). 79.83 is the level that needs to hold for the short-term view that the dollar has entered wave (iii) to remain viable. At the hourly level the dollar appears to have completed a small five wave advance, and may be due for a short-lived correction. Correction target box in yellow on the chart.

It bears mentioning that this first wave is a very good-looking impulse wave -- about as clean as they get. If this is indeed the beginning of a nested third wave advance, it's always possible that the correction won't even make it down to the 38% Fib zone.

This article was originally published on Pretzel Logic's Market Charts and Analysis.

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