Dollar Validates 40-Month Cycle

08/07/12 INSIIDE Track:  

“The Dollar Index retested its early-June highs while remaining in a range of congestion.  It again sold off and is fulfilling analysis for a low in early-August – the latest phase of a 7-week high-low-low-(low) Cycle Progression.  

            However, it is equally important that this latest peak – during the month of July – fulfilled the potential for a 40-month high-high-(high) CycleProgression that now includes significant peaks in Nov. ‘05, March ‘09 & (?) July ‘12.  It also came within a basis point of reaching its 2-3 month upside target of 85.00/DX.

            The action of the Dollar continues to reinforce the bigger picture and corroborate long positions from late-2011 (triggered around 74.00–74.50/DX).  On a larger-degree basis, the upside objective remains around 92.50/DX – a level that could be reached in 2013.  

            The action of the next 1-2 weeks could have a profound impact on what occurs for the remainder of 2012.  An important low is expected in mid-October – creating a 75-week low-low-(low) Cycle Progression – but it is not yet determined in the intervening peak is intact… or still to come.  

            This cycle is 3 weeks shy of a 1.5 year (540 degree) cycle and has been corroborated by intervening turning points near the 180-degree marks (at 24-26 week intervals).

            The Euro spiked to new lows and could now see a rebound, capable of stretching into late-October or early-November – the next in a series of 180-degree/6-month peaks and corresponding 360-degree highs from Nov. ‘09, Nov. ‘10 and late-Oct. ‘11.  

            Regardless, the Euro is entering a decisive period, based on the monthly 21 MAC.  This channel recently turned down (which often prompts a 1-3 month reaction in the opposite direction) and is entering a 4–5-month period when the corresponding monthly 21 MARC rises sharply.   

            That could/should have an opposite impact – exerting more negative pressure on the current price of the Euro – for the rest of 2012.  It is not, however, unusual for a market to rebound to test this channel before entering an accelerated move lower.”

Dollar fulfilling potential for multi-month peak in July 2012 – and projecting larger-degree focus to late-2015 (Nov. 2015?) – the next phase of the 40-month cycle – for a more important peak.  Oct. 2012 expected to time intervening low, before next advance.  Euro is the inverse and should enter its next decline after Oct./Nov. 2012.