The price action in the U.S. Dollar since the 2011 bottom continues to unfold in the same manner as experienced following the bottoms of 1980 and 1995. This is within the framework of the numerous turning points in the 16-year cycle as labeled below. The February low becomes the definitive level that needs to hold in order to keep the bullish scenario in place.

The following charts display the daily price structure. The violation of the basic support line (B to H) into point J that occurred in December is common in all three charts (). It then developed into a double bottom, successfully holding around point H (). The current rally above point I, twenty-two months after the major bottom (), should find resistance from here to the 50-week (233-day) Bollinger Band (83.55) and the July highs at 84.10.

A subsequent consolidation that gives back less than half of the rally from February 1st, allowing the RSI to drop back below the mid 50’s, could be the precursor to a longer-term breakout, targeting the dotted red resistance channel on the monthly chart around 93 (labeled point 4).

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BOB HOYE, INSTITUTIONAL ADVISORS

EMAIL bhoye.institutionaladvisors@telus.net

WEBSITE www.institutionaladvisors.com

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