I’ve been a little mystified as to how DXY could take a dive as per our forecast from two weeks ago [see: The End is (Probably) Near] while accommodating our forecast pop in both EURUSD and USDJPY. We discussed this in our analog details back on Feb 7, wondering whether the comparable drop had already taken place.
…things are further complicated by the fact that both the white channel bottom and the red TL already broke down before the VIX breakout — that first white dot on Jan 26. In fact, this breakdown was a big factor in the VIX breakout.
The puzzling aspect of the puzzle was that USDJPY is so integral to propping up stocks that it was hard to imagine a continuing rally without USDJPY’s help. And, it seemed unlikely that EURUSD’s target could be reached without USDJPY faltering too.
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