The U.S. Dollar Index is selling off today as the EUR/USD is rallying in what is still a downtrend. The dollar is trading at 85.25 this afternoon as London has called it a day and is likely enjoying a pint after a long week. So what does this move higher mean?
As the fiber rockets up to the bottom line of the Wave, there is a thick level of resistance between 1.3000 and 1.3070. So the real question is not whether the EUR/USD will go higher. Is has and it will. The REAL question is to where and will the downtrend be broken. Otherwise this move simply a bounce within a downtrend and that’s a correction, not a reversal.
So for now — and as long as prices are trading below the Wave — this is a bounce in the fiber that is setting up a daily swing short at 1.3067.