USD Index

Having failed to take out Thursday's lows - 2 tics does not constitute a take out - and having spent 3 days below the 100dma at 85.28 - the trade on Friday NFP day was a smash up day and reject of lower first to the 50 dma at 85.56 then to the 10 dma at 85.74 before closing back at the 50. Break back up through 85.90 and the E-Wavers will have to acknowledge 3 waves and therefore consolidation within a range at the least. Break back up through 85.68 and you pass back up through the Sept 30th settle, then take 85.72 the open for October then take 85.88 and you take out the April 30th settle. Market Profile suggests that the top of Value (VA) at 85.42 should hold early next week and for a peek at the base of VA from the prior week at 86.08. Break up through 85.11 and then 86.17 which happen to coincide with the 20dma and the 200dma will produce a screaming USD bull back to 87.70 the April G7 breakdown levels. I guess many people will be looking at the recent May-Nov beat me up range as a wedge on the weekly but a look at the monthly shows not only the range getting smaller but a triangle in development which would not surprise me by attacking the 99.05 level early in the new year. Why the bull case and not the bear case - well the bulk of domestic US funds are massively underweight the Greenback and the real money will dwarf anything the CBs try to do re diversification