Dollar ‘Collapse’ … The Reality

Reading The Chart

Before we even get started, let’s take a look at the last time there was this much dollar ‘collapse’ hysteria.

The update at this link, shows the analysis of what was likely for the dollar during the previous round of hysterics.

That was over two-years ago and in itself, highlights the ‘strategic’ nature of the analysis presented on this site.

The UUP (dollar index) chart is re-printed below and shows the location of the ‘reversal’ update.

Dollar UUP, Weekly

That was then; so, let’s move on to what could happen at this point in time.

The chart below shows three potential scenarios based on current price action and location.

No. 1

The dollar rallies from here; moving on to test the highs.

No. 2

The dollar continues lower, tests or penetrates the prior lows, then rallies in a Wyckoff spring to the highs and potentially higher.

No. 3

We really do get a collapse.

The dollar breaks the support area, comes back to test the underside and then heads lower.

Hysteria In … Hysteria Out

Of the above three scenarios, which one is going to create the most media hysteria?

A better way to ask the question, which scenario would be the most profitable for those entities that ‘control’ (manipulate) this market?

If the dollar is still in an uptrend and this is just a pull-back, then Scenario No. 2, would likely be the most profitable.

Played Like A Fiddle

Remember, the general public is being played like a fiddle.

The recent and on-going mass exodus from the small banks to the larger ones right into the potential CBDC trap, is a good case in point (not advice, not a recommendation).

So, it could be as well for the dollar in Scenario No. 2

If the dollar heads lower and manages to penetrate support, there’s likely to be media pandemonium.

That would go right along with YouTube grifters losing their minds … all the while, getting those important ‘clicks’.

If it happens, that would be a fantastic, potential set-up for a short-covering rally.

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

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