How much more upside for the greenback?

I’ve been watching the dollar to see where signs of safe haven unwinding may occur. I am neither expecting it nor forecasting it but I do need to know where the dollar might start to correct.

Now is as good time as any as the dollar has once again rallied up through the 86.00 psychological level. Let me be clear here: The market is still defensive! Gold is rallying as evidence of that.

But north of 86.00 has not been sure-footing for the dollar in part rallies.

dx d 2-12-2009 12-38-01 PM.gif

There is support in the uptrend on the daily and as long as the Wave is up and price are supported by it, we have an uptrend. The problem with this trend is that fact that there is no steady progression of higher highs.

This movement on the dollar — if there is a breakdown through 86.00 — comes as the EUR/USD is trading just above 1.2800 and the USD/CHF is dealing with the 1.1700 ceiling.