Dollar Poised for May ’14 Low
02/28/14 INSIIDE Track:
The Dollar Index has remained above its Oct. 21–25th low – set in synch with its 19-20 week cycle and a ~60-degree low-low-low-(low) CycleProgression (that subsequently produced another low on Dec. 18th). However, the Dollar needs to give a weekly close above 81.73/DXH to reverse its weekly trend to up and to confirm this bottom.
The weekly & monthly trend patterns are in conflict, so the current consolidation could continue. And, it could even yield a retest of – or spike below – the late-Oct. lows, without necessarily turning the monthly trend down.
This could also involve a spike below 79.00/DX – a level of vital support that represents a 50% correction of the ~73.00–85.00/DX advance. The lows of late-2012, early-2013 & late-2013 were all set in close proximity to this support – another reason why a spike below it could be imminent (triple bottoms typically do not hold).
A drop to ~78.00/DX – the more likely scenario – would have the Dollar testing the lowest low of the past two years, retracing .618 of May 2011–July 2013 advance and completing an intermediate HHL projection (84.96 high–81.58 high–projected 78.20/DX low; based on continuous-contract levels).
There are several longer-term cycles that portend an important bottom in March–May 2014, many of which could push this low out into May 2014. These cycles include a ~3-year high-low-(low) Cycle Progression, a ~5-year high-high-(low) Cycle Progression, a ~6-year high-low-(low) Cycle Progression, and a 16-19 month low-low-low-low-(low) Cycle Progression. Ideally, this last cycle would last 19 months – into May 2014 – and represent the exact mid-point of the Dollar’s most common cycle – a 38-month cycle.
So, an overall (but still likely volatile) decline into May 2014 and down to ~78.00/DX is probable before the next significant advance.
The Euro has rallied into an ongoing, intermediate (~60-degree) cycle in late-February and is poised to give the second neutral signal to its weekly downtrend. Combined with its prevailing monthly uptrend, that makes the next 1-2 weeks a decisive time for the Euro. It would need to give a weekly close above the Feb. 28th high in order to project further upside.”