For USDX, the week prior saw a pretty solid bounce up off a support level around the 75 mark, and it was looking good for a bottom reversal call. Fast forward to late last week and price once again sagged.

In our weekly forecast posted for subscribers Saturday November 7th, we clearly identified three specific price levels which needed to provide support ahead of the next bounce up (together with a couple of simple indicator events to confirm). If price violated those levels, then the near-tern call for a bottom was in jeopardy and a deliberate “wait and see” attitude was warranted ahead of any further attempts at either a swing or position trade. Into this week, those specific levels were taken out to the downside, and the confirming events of further upside development we were looking for did not materialize. Until, that is, today.

If you’d like to view a complimentary, no-obligation presentation that takes us back to last week’s forecast, relates this week’s action to that forecast, and plots a potential direction forward from here, please click the following link (for which you do not need to provide a user’s name or password – but please allow a few second for the screencast to load):

One day, it’s nothing but doom and gloom, with reports that some UN committee or other is proposing that the dollar be replaced as the world’s de facto reserve currency. Then the next, the buck is suddenly surging, gaining more than 400 pips against the Euro in just over a week (as
happened to the November 3rd low @ 1.4627).

So if the greenback is so sick, why the surge?


In our weekly forecasting service Forex Profits with COT, we’ve long been preparing for a dollar bottom; and for reasons, I might add, that have nothing to do with mainstream thinking. More than that, we’ve been noting the important correlations that exist between the dollar and other
bellwether markets (most notably the Dow), and been preparing for the significant trend changes that a US dollar bottom will bring about.

As a sample of the type of analysis we do each week for 13 markets (10 currencies and three bonus markets), I’d like to invite you to view this complimentary video presentation.

In this review, we look back at the latest USDX weekly forecast posted for
regular paid subscribers on Saturday October 31st, compare to actual price
action as it unfolded this week, and offer up some thoughts and trading
pointers as to where the market is likely headed from here. Potentially
useful information for whatever Forex major pair you trade.

I hope you enjoy the presentation.

To Your Every Trading Success,

Frank Paul
& the Forexmentor team

Chances are, you – just like every one of us – have at least once felt excited on realizing a major breakout or trending market was underway as expected. You jump in short on a big down move and price goes in your favor by 50, 100, 200 pips or more.  Then the next time you look at your dealing window – poof – it’s all gone and a stop has been triggered.

Why does this happen?
Well, at the risk of a bad cliche, price is like a sailboat – tacking and gibing in the wind, never reaching its ultimate destination in an uninterrupted, straight-line path.  Along the way, near term overbought or oversold conditions need to be alleviated before the market can continue. This is what corrective sequences are all about.

It was precisely one of those moments we forecasted for GBP/USD in our weekly Forex Profits with COT review posted for subscribers on Saturday, October 3rd.  In our Weekly Flash summary report, we had this to say (quote): The many subdivisions we see in the wave count portend a long-term downtrend continuation. However, in the near term, we have a
traditional 123 bottom (Elliott .iii of (iii)) which may resolve to some type of corrective process prior to the next big leg down.  Allow for a short-lived upside target to 6096-6277.

While this past week was a difficult one for forecasting in many markets, Cable did validate our call by creating an apparent 3-wave correction to a previously documented resistance zone, and to well within the target range we specified.  All of which was helpful in understanding whether this week was a good one to go short the position trade or not.

If you’d like to learn more about the analytical process we used to make this call, please watch this video.

More recently – going back to last week – we advised subscribers that it was time to shift back into a bullish stance on EUR/USD, but clearly noting that we were into the “tail end of a fifth-wave advance at various degrees of trend”.  Put in plain English, that meant that the latest rise (from the lows for the week of Sept. 7^th) was likely to be the last before what is expected to be a major topping process – again, concurrent with a major bottom reversal on the dollar.  And please note how totally contrarian this outlook is to what so much of the mainstream thinking is along the lines of a dollar collapse due to some imaginary hyper-inflation (which, incidentally, is about as empirically evident as leprechauns running around in the forest).

Interested in what led us to our latest near-term bullish forecast for this pair?  Wondering where it’s likely headed next?

For answers to these questions, please watch this week’s video presentation.

-Frank

Happy Trading,

Frank Paul
& the Forexmentor team