Well it now an important decision point for the US Dollar. Its now almost ready to hit that 81 area of support that connects the bottoms from approx Sept 2011 to now, If you connect the bottoms from 2008 to now, that line of support is about 74.

A similar but opposite “resistance” line is about to be hit at 1.26 or so on the Euro. So no more watching paint dry now. This will be interesting to watch now as a major move is about to happen. Just which way is the question.

One Elliott wave school says the move since September has been impulsive. That is beyond me to be honest. The other school says since September 2011 84 was a Wave C top of a big ABCXABC. All I see is a bunch of overlapping waves since September 2011. Nothing impulsive. The latest 84 top was on very low volume and falling open interest. As the daily chart had its upmoves recently from July to now, the “Weekly” stochastics topped and turned down. The MACD histogram was falling and approaching the zero line. It has now penetrated it and gone below zero on the Weekly. My current bias is down. I will likely by some calls and puts right at 81 with just a slight down bias with 3 Puts to 2 Calls as it really could go either way here.

However, as I said, it’s a stretch but its also possible that since Sept 2011, which was a wave 2 or B bottom, the upmove from then to now has been a leading diagonal of some sort. As I mentioned before, this same pattern occurred in Copper a few years ago when many thought it was a ending diagonal only to be surprised that it blasted off from there to eventually the upper 400s. In 1987 after the big Dow crash, we had an upward diagonal that was the precursor to the blastoff into the 1990s.

So the Dollar and the Euro are at similar critical points. For the dollar If this was a leading bull move wedge, we head to the 100s. If 84 was a C wave top, we head to 74 and that could be penetrated below back down to the 60s to complete a Wave 5/C, down, and then the upward bull will commence.

The next few days will tell us which way so again, this will be more fun than watching paint dry. The big question will be..”whose economy stinks more. The US or Europe”. That will tell the story I think.