Is The USD Bull Fizzling Out ?

When I last wrote on the return of USD since  last year
(http://tunmarvinworld.blogspot.com/2009/10/usd-come-mother-lode-of-all.html and http://tunmarvinworld.blogspot.com/2009/12/usd-bull-to-kick-teeth.html), practically the whole world was talking how the USD will becoming the Japanese Banana Notes  soon. But instead of falling further, the USD Index has since rallied to a high of 82.24 from a low of 74.17. It has recently hit the 50% retracement level of the last bear cycle.

At this important junction, I think it is time again to take a look at the charts again to see what is likely to happen next. From the monthly chart, I think the USD may be in the beginning of their long term bull cycle. I take note there is a beautiful bullish divergence formed at the MACD and with the current rally, the MACD is pushed toward its zero signal line which is usually a more bullish signal. The Stochastic has also crossed up, since we are talking a monthly chart here, any crosses up is considered as more significant as if it does it at a daily chart. The more significant is the D- seems to be about to cross below a rising D+, if we can see a proper positive crossing up, this would be the first time since September, 2008.

If I am to count the bull rally between August,2008 to March, 2009 as the first up Elliot wave count, then we may soon see a powerful wave 3 unfolding in the near future.

In the weekly chart, with the exception of an overbought Stochastic and ADX going above both the D+ and D- (a more confirming overbought sign), other readings still remain bullish as the MACD has gone above the zero signal line and is still rising . Price is maintaining above the upper Bollinger Band. So unless I see price goes below the upper band, I would not be too worry about the health of the current bull.

While the monthly and weekly chart may still favor the bull, the daily chart is a different picture. Both the Stochatic and MACD have turned negative and began falling. Price has also fallen below the upper Bollinger Band which is worrisome. If it goes below the lower band, then the USD bull may be in trouble. I am getting more cautious as there is a bearish divergence at the MACD and price. And there is also a bearish divergence at the ADX which has formed a lower peak which is telling us the bull strength has been withering.  I think the USD may have reached a temporary top  at this junction .

Summary:-for  the USD , the monthly chart is pointing for a long term bull market; the weekly chart is neutral as some indicators favor the bull, some are not; the daily chart is telling us that the bull may be in big trouble soon.

Fundamentally speaking, there is major crisis looming over the Club Med (Greece, Spain and Portugal) , then may be the Italy, Ireland and UK which would cause further selling of the EUR and  augur well for a continuing bull for USD. But the charts seem to be telling me something on the opposite. The EUR  chart is indicating the possible return of a strong bull which I will write on it in 1-2 days time.