The USD Crash Thesis
I think we're at a major point for USD. It's either about to make a strong bullish breakout or the failure of that implied a sharp down move in the dollar.
I've been very bullish on the USD for a while and will be ultra bullish if the following breakouts can be made, but this is also the point where it's best to prep for the failure of the USD bull move - which would likely be a spectacular event.
I first floated my USD bull thesis here in mid 2021 just as the bull run was starting. Near the end of it I pointed out the different pending reversal patterns.
The first of these was complete.
And since that time I've been mainly bullish on the USD.
However, the alt forecast was this;
If that is the move in play, we'd be very close to the USD reversal. EURUSD making a butterfly (wave 5) low off a two decade downtrend and heading into the C leg to correct that, would equal a crash in the USD.
Mirroring the implied move of EURUSD in a C leg onto DXY it'd be suggesting to us that what we've really seen here is the formation of a left shoulder and we're heading into the head. Which would be a spectacular crash move.
Alt ways to map this USD crash would be USDCHF would likely make a 1.61 extension low of the failed reversal.
The USD bull action of late has been compelling but this has all happened inside of a zone where it would be common to have a bull trap if it was actually setting up a slam.
Here's a post from the GBPUSD low.
The rally has come up to a similar area where the chop zone was marked into the forecast.
This was a 76 retracement and the retracement to the common resistance level was my main reason for getting back in as a USD bull here, fading the XXXUSD rallies.
But a failure of these highs to hold would be a strong indication that the GBPUSD downtrend has failed.
EURUSD has traded for 2 years in a range. Over the last month we poked out the bottom of that range. This is probably the breaking of the ranging period.
It could be a simple break. The lower end of the range is broken and it's time for the USD to shine. Or, this could be the fake out before the upside break in EURUSD.
Which would be a USD reversal building into a full blown crash leg is, or near to, imminent.
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A 2 year range in EURUSD is very likely to set up a trend of not less than 6 months (Broadly speaking, there'll be shallow pullbacks).
The odds of there being exceptional money to be made in the FX markets in the first half of 2025 look really high.
Boom or bust, USD looks set to make an exceptional move.
If we see it starting to weakening in the coming weeks, that could be a sign of it starting a mighty reversal.
For the thesis of a C leg in EURUSD to be true, there has to be a crash in USD. C legs are always crash legs. For perspective, here's the EURUSD chart inverted.
If that is coming, we'd have to be close to the start of it.
Although there could still be a bit of fight in the USD bulls even if the turn is coming.
The C leg coming into play in EURUSD would be the best Forex trading op I can think of. It'd be crazy easy to make money short the USD.
Worth watch listing and being quick to act if the bearish breakout in EURUSD weekly chart fails.
I've been very bullish on the USD for a while and will be ultra bullish if the following breakouts can be made, but this is also the point where it's best to prep for the failure of the USD bull move - which would likely be a spectacular event.
I first floated my USD bull thesis here in mid 2021 just as the bull run was starting. Near the end of it I pointed out the different pending reversal patterns.
The first of these was complete.
And since that time I've been mainly bullish on the USD.
However, the alt forecast was this;
If that is the move in play, we'd be very close to the USD reversal. EURUSD making a butterfly (wave 5) low off a two decade downtrend and heading into the C leg to correct that, would equal a crash in the USD.
Mirroring the implied move of EURUSD in a C leg onto DXY it'd be suggesting to us that what we've really seen here is the formation of a left shoulder and we're heading into the head. Which would be a spectacular crash move.
Alt ways to map this USD crash would be USDCHF would likely make a 1.61 extension low of the failed reversal.
The USD bull action of late has been compelling but this has all happened inside of a zone where it would be common to have a bull trap if it was actually setting up a slam.
Here's a post from the GBPUSD low.
The rally has come up to a similar area where the chop zone was marked into the forecast.
This was a 76 retracement and the retracement to the common resistance level was my main reason for getting back in as a USD bull here, fading the XXXUSD rallies.
But a failure of these highs to hold would be a strong indication that the GBPUSD downtrend has failed.
EURUSD has traded for 2 years in a range. Over the last month we poked out the bottom of that range. This is probably the breaking of the ranging period.
It could be a simple break. The lower end of the range is broken and it's time for the USD to shine. Or, this could be the fake out before the upside break in EURUSD.
Which would be a USD reversal building into a full blown crash leg is, or near to, imminent.
-----
A 2 year range in EURUSD is very likely to set up a trend of not less than 6 months (Broadly speaking, there'll be shallow pullbacks).
The odds of there being exceptional money to be made in the FX markets in the first half of 2025 look really high.
Boom or bust, USD looks set to make an exceptional move.
If we see it starting to weakening in the coming weeks, that could be a sign of it starting a mighty reversal.
For the thesis of a C leg in EURUSD to be true, there has to be a crash in USD. C legs are always crash legs. For perspective, here's the EURUSD chart inverted.
If that is coming, we'd have to be close to the start of it.
Although there could still be a bit of fight in the USD bulls even if the turn is coming.
The C leg coming into play in EURUSD would be the best Forex trading op I can think of. It'd be crazy easy to make money short the USD.
Worth watch listing and being quick to act if the bearish breakout in EURUSD weekly chart fails.
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