I've been blogging relative to the weekly and monthly charts that "Until the index drops below 75.62, the dollar is in a position to rise".
Any asset class down to zero is in a position to rise. However, the index has penetrated that price support which definitely increases the yuck factor for the USD. I'm not sure who could still be selling because of the overwhelming sentiment against the buck but there's definitely an absence of buyers. If, for some reason, the price did move up, you'd probably see a great rush of short covering. In other words, the move would be violent.
The next support is the swing low of 74.16.
At this point, the index might have completed a C wave of a large ABC correction. I've marked it on the weekly chart below. There's also positive divergence with RSI on the weekly chart. That's pretty much it, though, for positive thinking Elliott Wave projections. One could also create a wave count that has this dropping below 70.90 but I don't think it's going to do that.
Here's the weekly chart:
© Dianne Fecteau, 2011. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
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