Worrying about the U.S. Dollar trading lower? It’s just a correction.

It’s just a correction folks, keep walking, nothing to see here. The uptrend is still intact.

But for your doubters, let’s take a closer look.

The first view is the “market memory” or “lookback” – just two words that mean the same thing that I use to describe when I my chart view includes the complete amount of data that I feel reflects the

1) trend
2) important highs and lows
3) relevant last major moves (rallies and sell-offs)

The key words are psychologically relevant when it comes to this view because at some point in my analysis I will view the pair from within its market memory. For the daily chart, it’s one year.

1-4-2012 7-17-18 AM.jpg

Notice that since it’s early January, I have included data back to late December 2010. The view won’t always be exactly one-year, but get as close as you can. The angle of the 34EMA Wave in this view is what I use to determine the market phase. Here it’s a “twelve to two o’clock angle”.

The uptrend has – for now – found buying support above the 34 period EMA high as well as the 20 period SMA close. This area is also the swing buy zone for uptrends.

The uptrend is VALID only as long as the 34EMA Wave angle remains at “twelve to two o’clock” and price action is supported above the 34 period EMA low. IF the Wave flattens out, the market trend will have shifted. IF price action breaks the support of the Wave, support for the trend has been broken.

By the way, Happy New Year Baby Pippers! I was very quiet through December because quite frankly I was enjoying the company of friends and family in town for the holidays and used that downtime to recharge and consider what I did and did not like about 2011 and more importantly what I’d like to accomplish in 2012. I made some big changes in how organize and plan my day and projects. I wrote a blog update about it here for those of you who may like to check it out.

  • Kioniboy84

    actually what your chart shows is that the index dropped off right about now this time last year…which also supports the seasonal cycle of the index…why not this year?

  • Raghee Horner

    Certainly a move lower – seasonal or otherwise – is not out of the question but the bullish momentum is still following through and the 34EMA Wave held as support on the recent pullback. That said, the December 2010 high at 81.63 is where the story could begin to change if it is going to at all. This is where the index is reaching for on the post-NFP surge. I have total respect for the rhythm of the markets (including seasonals), but let’s also remember that early December 2009 is when the dollar began its rally from 76.00 to 88.90.

  • Timothy Ato Kwame Moore

    USDJPY looks scary! Any hope next week?