I have been waiting for a USD Bearish move, which I believe will be a retrace rather than motive move (i.e. a counter trend move) for some time but so far it hasn't arrived. It goes to show that patience is a massive virtue when it comes to successful trading, that and careful money and risk management whilst seeking the right set up.
I have re-looked at USD using the Dollar Index as a guide and come up with the following assessment. Long term (Monthly chart) the overall picture of a major USD rally remains unchanged at this juncture as nothing in the fundamentals or technicals has materially changed and a rally is consistent with my Bearish bias for stocks and the Euro (Fair warning on my bias!). The market bottom is the Head of a Head & Shoulders formation with the Neckline as the upper part of a coiling Triangle. The breakout of this Neckline/Triangle produced a very strong and fast rally. I think the long term chart now shows a potential consolidation Flag formation (very strong lower line in terms of unsuccessful retests of this line as a supporting trend-line), however the upper line is weak. If correct then we may expect the upper line or thereabouts to offer resistance that pushes the USD into a Bearish move. This Move could either return to the lower Flag line or bounce of nearer term resistance to set up a retest of the upper line.
Looking at this on the Weekly chart you can see the latter retrace scenario in the form of a coiling Triangle 1-2 (pink), 1-2 (blue), which, if correct, may retest the channel breakout zone at the Fib 76/78% level before rallying away. However the Pink 2 could easily be a wave A that would result in the alternative scenario proving correct but I am not too worried about that at present as both scenarios as Bearish and price action should reveal which one is valid in due course. The Daily chart shows a possible road map for my lead scenario. A drop in a form that shows an A-B-C pattern that culminates and rallies from the Fib 76/78% would be a strong indicator that the big USD rally is on. I will be looking for correlations from other markets for this potential USD rally plus Fundamentals support such as deteriorating global economic conditions.