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US Dollar: Today a Bounce, Tomorrow a Bottom?


Wednesday's rally peaked just short of signaling a new upleg.

The following are the latest daily summaries of my ongoing intraday coverage, providing context to interpret price action. Any prices listed are for a contract's current "front month." Their direction tends to correlate with any ETFs listed for each.

Today's Highlight: The dollar stopped just short of signaling that a bottom had formed. The setup that predicted this attempt allows only a little more time before a rally must be underway, if not a new downleg instead.

Dollar Basket
Tuesday's retest of prior lows was attracted back up Wednesday by the magnetic narrow congestion that had formed on Monday's inside day. The recovery extended to test 81.45 but failed to close above it, which would have signaled a new rally leg underway.

Sep Contract EC; (NYSEARCA:FXE)
Wednesday's drop tried to reject Tuesday's retest of recent highs, but stopped short of testing the 1.3333 reversal signal, let alone closing under it.

Oct Contract GC; (NYSEARCA:GLD)
Wednesday's dip back to Monday's lows was still just more ranging around the rally's 1375.00 target. The delay in extending higher doesn't necessarily avoid a deeper dip, but the delay in reversing down does suggest the rally will try to resume. It might not get very far before failing, but it should try to resume.

Sep Contract SI; (NYSEARCA:SLV)
Narrow sideways ranging under 24.00 has persisted a little long, even for digesting such a substantial near-term move as the one that peaked nearly a week ago. The next trending attempt is likely to be false.

30-Year Treasury
Sep Contract US; (NYSEARCA:TLT)
Tuesday's premature rally did not extend higher Wednesday. Ranging sideways managed to fill the gap back down to Monday's 130-14 close, but a new low close remains likely.

Crude Oil
Oct Contract CL; (NYSEARCA:USO)
Tuesday's drop extended down Wednesday, now likely to test 103.25 or 102.65 instead of triggering the 106.25 buy signal.

Natural Gas
Gapping up Wednesday to Monday, and Tuesday's highs were a day late for providing the optimism that would have been better-timed Tuesday to confirm Monday's breakout. That becomes problematic ahead of Thursday's EIA report, which might force a normal correction to 3.36 into extending to 3.30.

Editor's note: Rod's analytical techniques are designed to efficiently identify targets and turning points for any liquid stock or market in any time frame. He applies his techniques live intraday, primarily to S&P futures, at RodDavid .com.
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