Dollar Targeted for May ’14 Low
03/28/14 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. The next/latest phase of that 19-20 week cycle came into play on March 3–14, 2014 – exactly when the Dollar set its latest bottom.
At the same time, the Dollar was fulfilling an 18-week high-high-(low) Cycle Progression. So, from a cycle perspective, the early-March low was significant. However, price action is yet to corroborate that.
The weekly & monthly trend patterns are in conflict, so the current consolidation could continue. The Dollar has not been able to neutralize its intra-year downtrend, so there remains a strong potential for another wave down – into May 2014.
This should 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 is likely (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) and a ~5-year high-high-(low) Cycle Progression, a ~6-year high-low-(low) Cycle Progression & 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. A drop into May 5–9, 2014 would also represent an exact 100% retracement in time (43 weeks up/43 weeks down).
In the interim, the Dollar could spike up to ~81.00/DXM (80.87/DXM is currently the monthly LHR for April) and potentially extend this advance into April 1st, the next phase of a 70-day high-high-high-(high) Cycle Progression.
The Euro extended its advance into early-Mar., giving it ample time to reverse its weekly trend up. Since then, it dropped to test and hold its weekly HLS (1.3751/ECM) on March 21st – signaling that a 1-2 month bottom should take hold in the ensuing week(s). It spiked to new lows into March 28th – testing and holding its weekly trend neutral point at 1.3709/ECM.
That means the Euro has remained in a weekly uptrend throughout this correction – setting the stage for a new, 1-2 month advance. The weekly 21 MAC – which has remained positive and is supplying support – corroborates this scenario.”
All signs & cycles point to May 2014 being the next watershed time for the Dollar/Euro relationship – in line with 3-year, 5-year & 6-year Dollar cycles, all of which project a multi-year low. The Dollar is expected to spike below 79.00/DX and set a low in May – ideally on May 5–9, 2014 – when the Euro should set its next peak. After that, the next phase of Euro-trouble is likely to take hold… and begin to accelerate the (EU) downward spiral – expected to last into ~2018.