After looking like wave (ii) may have ended yesterday, the dollar displayed some weakness later, with price slipping through the bottom of the cloud. The warning sign I mentioned in the post shown in the link above did occur - as price rallied (from point a on the chart below), the lagging line failed to move above the price line - see how it stopped just under where I have the iv label - not a good sign for a rally.
However, whilst the lagging line (I've changed the colour to turquoise) did drop through the cloud, it was only briefly - it stayed largely within it, even while price remained below. This suggested that a more sustained drop was probably not on the cards.
Now, price has rallied today and this time, the lagging line has moved above the price line.
Here's a close up of the action on the 60 min chart:
Dollar 60 min in close up:
The rally today has moved price back into and slightly above the cloud and the lagging line is confirming this as potentially bullish by moving above prices of 26 periods ago.
You can see the elliot wave count - it looks better as a wave (ii) correction now, with that drop yesterday.
In ichimoku terms, we need to see price and the lagging line get above the cloud. We have a bullish cross of the turning line (blue) above the standard line (red) - its a weak buy signal since it occurred when price was below the cloud, but price can confirm it by getting above the cloud and taking the laging line with it. As before, once above the cloud, price needs to find support on the cloud and any pullback in price should not result in the lagging line falling below prices of 26 periods ago (if it did, that would again be warning that all is not well with the potential rally).
Here's the zoomed out view on the 60 min chart for the bigger picture of the wave count:
Dollar 60 min zoomed out:
