U.S.Dollar Consolidates After Breakout Week

After breaking out higher last week, we saw the DXY consoildate this week in what I am counting as part of a fourth wave. So overall, there is very little change from last week's analysis and the bottom line is that as long as we continue to hold support, the pressure remains up on the DXY.

Smaller-Degree Structure

With the push above the 100.64 levelwel last week, we have initial confirmation that a bottom has been established in wave 2/B. From here, we should continue to move higher into the 101.86–102.61 resistance zone while holding above the 100.66–99.92 support zone below.

If we move below the 99.62 level, it would invalidate this advance as an impulsive wave structure and make it more likely that we are dealing with a wave C in an ending diagonal formation to the upside. A break below the 98.75 level would open the door for the possibility that a more complex top has formed as part of the purple wave iv.

For now, however, as long as support continues to hold, the primary impulsive count to the upside remains the most likely outcome. We are also tracking our Fibonacci Pinball structure quite well, which continues to support the bullish outlook. As a result, the pressure should remain to the upside in the weeks and months ahead.

Larger-Degree Structure
From a larger structural perspective, I continue to maintain two primary scenarios, both anchored to the October high, either as the white wave (3) or the green wave (5) of ((A)).

In the white count, we are tracking a corrective wave (4), potentially unfolding toward the lower boundary of the trend channel, with a diagonal forming for wave (5) in the next phase. If that lower boundary holds, especially near the 95.60 region, it sets the stage for a rally to develop in wave (5).

As is typical with diagonals, we may see overlapping, choppy price action that could make distinguishing between the white and green counts difficult in the early stages. The key will be in the structure of the next decline after this rally: if it unfolds as a corrective move, the white count would be favored, implying further upside potential in the years ahead. However, if that decline is clearly impulsive (i.e., five waves down), that would suggest the green count is taking hold, with the October of 2025 high already marking a significant top.

A sustained break below both the trend channel and the 95.60 level would substantially increase the probability of the green count. Still, as always, structural confirmation—especially in the bounce and follow-through—will be essential before committing to either scenario