A good time to update the Dollar wave count as we enter into the final stages of October. Lets start by digging deeper into the macro charts:
Dollar devaluation focus has always been the other leg to the stool and we are finally opening this chapter. This challenging environment is requiring investors to harvest premia outside of the US FX space and as a result the Euro is being used as the perfect instrument.
I have widely covered why the EURO is cooking a major bullish leg, for those wanting to dig deeper please see from the archives the EURUSD weekly chart:
Collaboration between USD devaluation and EUR funding is necessary to keep the flows alive. The divergence between FED and ECB is stunning and will help guide rate differentials starting this week:
For the European Macro chart:
For the technicals, from a strictly waves perspective the complete withdrawal of this [2] wave will happen over the coming weeks as we begin the impulsive leg. I am expecting a lot of cascading stops to trigger the outflows with QE Lite and more cuts a done deal. A break of the channel will be enough to trigger the damage and put bulls past the point of no return.
Highly recommend all to update their DXY charts as we enter into the impulsive chapter, feel free to jump in the comments and discussions with your ideas and charts on Dollar as we open the conversation for all to track.
Flipside to your inflection for impulsive Dollar downside; fwiw I have it as wave ii of iii of 3...with large upside to kick in as 2020 matures. With you till about the 94-92 area for this pullback.