August 27 Technical Update

Again, not much to comment on other than the dollar just cannot seem to hold ground. Most assets are overbought right now and a rise in the dollar would be bullish in terms of "cooling the heels" of asset markets a bit. Asset prices started today with a sell-off, but the dollar was unable to stay even on the day, and as it sold off, asset prices rose. This should have been a down day, but the dollar cannot stay up. The dollar rules over all asset values taking precedent over overbought and oversold conditions. We may not see the extent of some of those price pull backs that were discussed Tuesday night if the dollar can't even maintain a few days' gains.

You can see the trading range is still intact as discussed a few days ago. What looked like a forming rectangle may actually be a descending wedge or symmetrical triangle--it's still too early to tell (outlined by the blue trend lines). A pattern is not a pattern until it's a pattern, if you get by point. Before then, it's something that may turn into a pattern...

If this trend holds true, we should see the dollar touch the bottom blue trend line on Friday or Monday, and then reverse to the up side. The 50 day moving average is basically forming along the top blue trend line and acting as resistance. This is a classic consolidation pattern forming. If we see a real triangle form, then we could expect that odds favor the dollar breaking down and continuing its down trend. Time will tell.

Until the support line at 77.43 is decisively broken, we're just going to sit around and consolidate...