Two months ago, the US dollar went from the global currency world's "SH**" list to its glowing "IT" list. Between September 1 and September 30, the dollar enjoyed a powerful rally against the euro to its highest level in nine months.
At the time, the mainstream experts tied the dollar's uptrend directly to "investors re-remembering" the currency's "safe-haven" status. The problem is, those same investors also "re-forget" said status every time the dollar falls right alongside negative economic news from the US.
As for the consistent explanation behind the dollar's September rally, EWI's
Currency Specialty Service has the answer. For a few months now,
Currency Specialty Service has been tracking the June-to-August contracting triangle Elliott wave pattern in the US dollar charts.
For those new to our pages, a contracting triangle is a sideways move containing five waves labeled A-B-C-D-E. Once a triangle is complete, it is expected to be followed by a swift "thrust" in the direction of the larger trend.
The dollar's September rally to nine-month highs was that very post-triangle "thrust." You can see it "upside down" in this chart of the EUR/USD (copied from the
Currency Specialty Service on Nov. 7). "Upside down" because when the U.S. dollar rallies, the EUR/USD forex pair falls:
Now comes the super exciting part. You just saw how the resolution of a months-long contracting triangle can lead to news-worthy move. What about a years-long Elliott wave triangle?
Look again at the dollar chart above and you can see the converging trendlines of a LARGER contracting triangle underway. And, according to
Currency Specialty Service, this massive pattern could have equally massive implications for the buck.
EWI’s Currency Specialty Service brings you intraday and daily actionable forex forecasts that you can really put to work 24 hours a day.
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