Friday, August 7, 2009

Dollar T1

I'm currently watching what may be a T1 pattern evolve on the dollar chart. The critical period is what happens as the dollar bounces out of the now due daily cycle low. If the T1 pattern is going to play out then the dollar shouldn't significantly move back into the consolidation zone.

Yesterday the dollar made a swing low and I would say the odds are very high that we just got the cycle bottom. Now we just have to see if it can re-enter the consolidation zone. If it quickly breaks back to new lows I would expect gold to take out the upper trend line of the triangle we've been watching and the C wave advance should be on in earnest.