The erratic downside ratchet for the Dollar continues from the the last interim 1.0160 high. As each leg of this decline to the upside and the downside has developed in a 3 wave format, we suspect a Diagonal wedge pattern best defines the price action. The A leg would be complete with the drop to 1.0050 and the B wave with the erratic rally to fail 1.0160. The strongest part of the decline or C wave finished with the test of interim 99.60 support to prompt the messy D wave consolidation back to 1.0035. That suggests the terminal leg of this pattern or E wave will take a 3 wave structure of which we are probably ending the first leg or minor A wave with the dip to 99.30. As upside reactions fail 1.0000 down channel resistance expect a full test of 98.90 medium term consolidation support possibly as a flat bottom triangle. However, the market must regain 1.0035-1.0070 resistance to secure this larger range trade. Below 98.90 may well inject downside momentum to a secondary 97.60 target.
Further Videos or Commentaries are available on www.marketvisiontv.com or @EdMatts on Twitter
By Don Haines, MarketVisionTV.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.
