USD Bull or Bear?

[Mercury]

After such dramatic overnight price action it was always going to be a challenge to make sense of things in the cold light of day without a few hours or even days for things to settle down.  Still no harm in trying so here goes.

 

My previously posted long term analysis remains in play, which is encouraging given the volatility.  I had and still have 2 scenarios as follows:

 

1. The market retraces to the previously broken Triangle line and then rebounds off to kick off a strong wave 3 rally, the rally many have been talking about for some time.
2. The market breaks back down through that triangle line in a larger A-B-C form wave to make a lower low wave 4 (pink).

Last nights price action could be seen as exactly fitting scenario 1 but I would need to see a higher high than the 25 Oct high to be confident of this.  It has occurred at a 50% Fib with a very strong pin bar so the odds are good at face value.  However I am wondering where the key fundamentals impetus is unless Fed rate rise in Dec is driving it.

 

The alternative view is that the whole Trump move is an A-B preparatory for a strong wave C down to make the wave 4 retrace completion and then we get the rally (clearer on the 4 hour chart).  There are 2 possible Wave B turning points but a fresh higher high negates scenario 2.

 



[donaldprice]

DX about to take out December 2015 high, bullish trades steadied according to CFTC, but without a doubt have been increasing since the Trump election. Emerging markets with high borrowing costs are going to take a hammering at this rate.