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The Dollar's Long Term Path Is Upward

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We're posting this big-picture view of the Dollar Index so that it can serve as a reference for future articles at InsideFutures. Much of the technical analysis and trading guidance we provide to the public and to our subscribers relates to the long-term forecast for the U.S. Dollar, and that is especially true when we chart currencies such as the Euro, the Yen, and the British Pound.

The basic reason we believe the Dollar can climb higher is that the moves up from 2008 have shown an Elliott wave impulsive structure on multiple time frames. That structure might conclude a few years hence after tracing three waves in A-B-C fashion, or it might go on to produce five waves in a 1-2-3-4-5 pattern that could persist into the mid-2020s.

Regardless of whether the big pattern eventually consists of three or five waves, the minimum requirement in either case is for the Dollar to reach a new high to complete wave 'C' or '3' of the sequence that began with the bounce in May, 2011.

The structure up from 2011 should consist of five sub-waves, which are labeled [i]-[ii]-[iii]-iv]-[v] on the chart above. As is typical, wave [iii] represented a powerful move in relation to the rest of the sequence (so far).

It is helpful that the dominant 43-month price cycle had lows corresponding to waves [ii] and [iv]. That suggests a possible time to watch for upward wave [v] to finish, perhaps around the end of 2019.

The index's path to reach a new high during the next one or two years should itself consist of five waves. Based on analysis on a weekly time frame (not shown), the index is testing important resistance now that could put a cap on the first small wave (i) of the sequence. We would expect a minor downward retrace soon as small wave (ii) to test standard Fibonacci retracements at 93.78 and possibly 91.64.

Eventually, the small upward waves (iii) and (v) should test higher resistance levels at 102.90 and 106.90 based on Fibonacci extensions.

With morning and evening updates, we track the Dollar Index and Euro futures every day at Trading On the Mark, as well as the S&P 500, crude oil, treasury bonds, and gold.

There are still a few days left for new subscribers to take advantage of our special summer offer and see extra savings. See details here to get 12 months of access to the Daily Analysis service for the price of nine.

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Trading On The Mark keeps its subscribers on the right side of the market on timeframes ranging from intraday to swing trading. Beyond the public blog, subscribers have access to frequently updated charts and posts covering equities indices, currencies, bonds, metals, and other commodities. Members also can participate in TOTM’s live intraday trading forum, which provides real-time guidance on market conditions and entry and exit opportunities in the e-mini contracts for equities indices and currencies. 

TOTM’s  technical approach is grounded in Elliott Wave and Gann techniques, while also making use of Fibonacci relationships in price and time, cycles analysis, and other more esoteric approaches. Most subscribers have several years or decades of trading experience, yet the website offers an environment where the dedicated intermediate-level trader can learn much that is not published in books or found in courses.

The company was established in 2008 to meet the needs of an online community of traders who have worked together since before 2005.

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