Wednesday, 18 August 2010

13:54 BST - Dollar Update; 20 min chart - possible head and shoulders

I've re-labelled the move in the dollar since the high at 83.016 to remove the triangle that appeared to have formed yesterday. With subsequent price action, this may be a better alternative (you can see the bigger picture on the dollar page):

Dollar 20 min:

If we don't see a turn up soon, we'll be in danger of taking out the 81.534 level I've been mentioning as the invalidation point for the main count as labelled. That would mean that the most likely bearish alternative would put us in a wave (ii) correction.

This might fit with the head and shoulders pattern I've marked on the chart which has a target to about 81.000 if it follows through. This would be about a 70.7% retracement if we are in wave (ii) not iv.

Of course, a failed head and shoulders would be bullish for the dollar. However, until it starts pushing up impulsively again, we have to assume that more downside may be on the cards.