My short term DX wedge broke before the open so I have had a very careful look
again at the DX chart, this time on the daily. I have looked back at the
whole rally since December and found a very solid rising channel to
encompass the whole move. That channel gives us a target, if we hit it
today, of 74.75 for the upper trendline. That would be likely to mark a
major interim top on USD, though we could still hit the trendline again
further up as we did after the hit of the upper trendline on Feb 5th:
I'll be watching that target very carefully, as the next hit would
probably mark the low for this equities correction, just as it did on
Feb 5th.
I had another look at the broadening descending wedge on EURUSD, and
while that could yet break down just as the DX wedge has broken up, my
next target is in the 1.276 area:
The wedge on the DX daily may not yet be broken of course. If we hit the
top of the DX channel and then return within the wedge by EOD, then
technically, it would be unbroken. That would be a big move and a big
reversal, but not impossible after the moves in the last two days.
