Posted on 9/21/2017 6:49 AM by Dave Toth
As we discussed in yesterday afternoon’s Technical Webcast on the peak/reversal threats developing in the Euro and British Pound, we cannot conclude a long-term reversal from shorter-term technical events. However, the reversal of 10,000 miles begins with a single step, and yesterday afternoon’s recovery and poke above 14-Sep’s 92.66 initial counter-trend high in the USD Index may be such a step. This resumption of last week’s rally leaves yesterday’s 91.52 low in its wake as a smaller-degree corrective low the market must now relapse below to render the recovery attempt from 08-Sep’s 91.01 low a 3-wave and thus corrective affair consistent with a broader bearish count. Until such sub-91.52 weakness is proven however, there’s no way to know that this current rally from yesterday’s 91.52 low isn’t the a 3rd-Wave of a new, impulsive move higher that, for ancillary reasons we’ll discuss below, could morph into a major correction or reversal of 2017’s entire decline. In this specific regard we are considering 91.50 as our new short-term risk parameter from which non-bearish decisions like short-covers and cautious bullish punts can now be objectively based and managed.