For those literary enthusiasts amongst us, you would recognize the title as the line supposedly penned by Mark Twain when it was inquired of him while in London regarding a published obituary written in the United States.
However, more accurately, his response to the reporter’s inquiry was “The report of my death was an exaggeration.” But, I digress.
When Mr. Powell reported that rates may not be rising any further, many were writing the obituary for the US Dollar. But, just like with Twain, I think this obituary is a bit premature.
I am going to repeat what I said over the last few weeks, as it is still quite applicable:
“One of the benefits of using Elliott Wave analysis is that it puts the market into a larger context which cannot be gleaned from other methods. In the DXY, as know that the market is tracing out a b-wave. And, what we know about b-waves from Elliott Wave analysis is that they are quite variable in nature. That certainly seems to be what we are experiencing.
Last weekend, I noted that “until I see a break down below the 95.45 level in impulsive fashion, I have to at least recognize the potential of the DXY to extend up as high as the 98/99 region.”
The choppy structure within which we have been navigating the DXY is still suggesting we are in an ending diagonal for the c-wave of the green b-wave. And, as known within ending diagonals, there are many starts and stops, along with whipsaw action.
On a micro structure, I am unsure if the current rally off the 96 region is the a-wave of the next a-b-c structure higher, or a b-wave in an a-b-c retrace. Unfortunately, these are the issues with which we must grapple when dealing with these types of structures. For this reason, I am going to have to slightly modify my support again to the 95.35-95.50 region.”
At the end of the day, I don’t think there is any more insight that I can provide regarding the dollar chart. I still think the market is heading up to at least the 99 region to complete an ending diagonal. And, it will likely continue to be choppy, as that is just how these diagonals take shape.
But, I will add that until we are able to move through the 97.55 level, we may test support noted above one more time.
View chart illustrating the wave counts on the DXY.
Avi Gilburt is a widely followed Elliott Wave technical analyst and founder of ElliottWaveTrader.net, a live Trading Room featuring his intraday market analysis (including S&P 500, metals, oil, USD & VXX), interactive member-analyst forum, and detailed library of Elliott Wave education.