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Is US Dollar Bottoming Right Here, Right Now?


Bouncing out of Tuesday's retest of recent lows would likely become a substantial 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: Crude oil's volatility may have been affected partially by the dollar's drop Tuesday. But the dollar's drop, which is trying to resume its recent decline, has an opportunity to form a durable bottom if another rally begins without delay.

Dollar Basket
The congestion of Monday's narrowly ranging inside day made the next trending attempt likely to fail. That would help to recover from trending down first that retests prior lows. Prior lows were tested Tuesday, so closing back above 81.45 would now launch a new rally leg. The pattern is otherwise vulnerable to extending the decline.

Sep Contract EC; (NYSEARCA:FXE)
The congestion of Monday's narrowly ranging inside day made the next trending attempt likely to fail. That would help to recover from trending up that retests recent highs. Tuesday did test prior highs, so reversing to close back under 1.3333 would now launch a new downleg. The pattern is otherwise vulnerable to extending the rally.

Oct Contract GC; (NYSEARCA:GLD)
Tuesday's narrow ranging around 1375.00 did not affect the pattern. Not extending down further prevented trapping shorts that would have been reliable for extending the rally.

Sep Contract SI; (NYSEARCA:SLV)
Ranging narrowly Tuesday still held under the 24.00 bounce limit whose recovery would signal the rally was extending.

30-year Treasury
Sep Contract US; (NYSEARCA:TLT)
Tuesday's gap up to test Monday's upper-end was too shallow to even begin invalidating the two prior sessions' consecutive lower closes, and the balance of the session ranged around 131-06. The two prior sessions' setup requires at least one more new low close, which the gap back down to Monday's close will try to attract.

Crude Oil
Oct Contract CL; (NYSEARCA:USO)
Monday's close had not yet resumed the rally off of its 106.25 pullback limit test, requiring the rally to resume by Tuesday's open. Instead, the open gapped down to test 105.20. An intraday bounce up to 107.00 was retraced entirely back down to new session lows testing 104.65. Gapping up Wednesday above 106.25 would signal the rally has resumed.

Natural Gas
Monday's gap up did not extend higher Tuesday, failing to provide a confirming second consecutive higher close. Lower prior highs down to 3.36 are likely to be tested before the rally can resume.

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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No positions in stocks mentioned.
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