Dollar & Yen Alert
US Dollar Forecasting More Bad News In Japan
Foriegn Exchange Markets
March 18, 2011
UPDATE: March, 19 2011
Friday's action in the US dollar is concerning and is casting doubt the scenario outlined below is valid. If the US Dollars does not
rally strongly Monday it will negate the strategy in this article. The Financial Police® only wanted to get real intelligence information
out so people could act on it. However, the bear market in the US Dollar is relentless.
We must be cautious and conservative.
In the event the Dollar rallies strong on Monday, wait until the upper trend line (see image below - app. 76.75) is breached to confirm this formation is valid.
Do not try to bottom fish.
In the event the Dollar continues to sell off on Monday, it will signal bad news for US paper. The recent unprecedented changes in the quantity
of money are not fooling foreign exchange traders.
Original Article
Unfortunately, the US Dollar could be forecasting a very negative outcome for the situation in Japan. The Financial Police® regret this deeply; however,
here is why we are publishing this intelligence information.
You are looking at an hourly chart of the USA dollar. The formation you see, is called a diagonal triangle according to the Elliot Wave Theory.
This pattern is completing right now. We will then see a strong rally in the US Dollar.
The result will be what is referred to as post triangle thrust in the opposite direction
of the triangles trend. The trend of the triangle is down, or bearish; therefore, the thrust will be bullish, or to the upside.
According to the Elliot Wave Theory, the counter trend move should equal or exceed where the triangle began.
It began at 81.20 on the US dollar index. That is a huge move in the foreign exchange markets.
Let's Be Practical, Not Technical
Fundamentally, this rare formation is forecasting a significant and rapid intermediate term rise in the US dollar. However, the dollar index is a combination
of several currencies. A very important question to be asking right now is if the other currencies will move down in concert with each other
or if one particular currency will move down against the dollar in a large way? Steal the show so to speak. See where this is going?
The Japan Factor
It is possible this rare formation is forecasting a very rapid and large devaluation of the Japanese Yen vs. the Dollar. This rapid decline
in the Japanese Yen would be a result of the current situation deteriorating.
The Financial Police® apologize for forecasting this. We do not wish to offend anyone. However, we have an obligation to All Citizens of the
World to disclose intelligence information in a truthful, objective and timely manner.
What Do We Do With This Intelligence?
First and foremost, pray. Pray the situation in Japan has a more favorable outcome and this intelligence information is wrong.
Second, pray some more.
Third, if you are a currency trader get short the Yen and long the US Dollar.
Fourth, if you are holding American Dollars and want to exchange some of them for Canadian Dollars, for example, be patient. A better price than
the current 1.0185 could be right around the corner.
Is the Bear Market in the Dollar Over?
Most likely not. When this upward counter trend rally is complete, the bear market decline in the US Dollar should continue. This is exactly
why we just wrote about being patient to buy Canadian dollars. If the bear market in the Dollar is still the major trend, any sell off
in the Canadian dollar would be a buying opportunity for holders of USA paper to diversify into another currency and hedge currency loses.
Exactly When Will the Dollar Bottom?
One of three things can happen on the final "E" wave of the triangle.
- It breaches the lower trend line.
- It touches the lower trend line.
- It falls short of the lower trend line.
The point is any of these three scenarios can play out. In this instance, it appears the "E" wave either touched the lower trendline, or
came very close yesterday. However, it is also possible the "E" wave may not be completed and will make another run at the lower trend line and breach it.
This would be the most ideal entry point and appears to be happening right now.
In the event a currency trader does not engineer an entry point based on one of these three
scenarios, wait for the market to "prove itself" and break through the upper trend line thus providing confirmation.
This is a more conservative buy signal.
William Bonofiglo
Director of the Financial Police®
March 18, 2010