Par = 100

After the Dollar's dump this week, and the breaking of a potential smaller triangle, I decided to look again at the longer-term three-month chart of the US Dollar Index (via the futures). The Dollar may have given off important longer-range clues this week.

US Dollar Index Futures - 3 Month - Potential Triangle

Where the Dollar decided to turn lower this week was at the top of the upwardly sloping magenta parallel shown on the right. This is one clue. And it made me wonder, "Is the Treasury just basically allowing the Dollar to range as long as it doesn't stray too far from the 100 marker?" Such action might describe a very long-term triangle because the internal counts are very challenging from the standpoint of counting impulse waves, upward. They don't work well at all since the (X) wave. That is a second clue.

A third clue is that (from the quotes on this site) the Primary ((C)) wave up would be 'just about as long in price' as the Primary ((A)) wave, up, and it is definitely longer in time, meaning the two waves might likely be of the same degree. A fourth clue is the apparent three-wave sequences in the Primary ((A)) and the Primary ((B)) waves. 

A Fibonacci fifth clue might be the rather flat Elliott Wave Oscillator on the long-term chart. 

So, is this just about Treasury policy to - let's call it - keep the Dollar relatively stable? To keep it oscillating around the 100 level? 

I can't swear to it, but it may illustrate how institutional groupthink works or implements policy. Clearly, this potential triangle has an invalidation point above the Primary ((A)) wave. But it also suggests that a break, back-test and subsequent failure of the recent up-parallel might lead to a nasty spill - whether the inflation scare gets worse or not.

This is the second post this weekend. If you have not read the first one yet, you may wish to read it also.

Have an excellent rest of the weekend.

TraderJoe