FUND NEWS: Houston, we have a bank account.  With any luck, we’ll also have our brokerage account open today.  I’m taking the morning off to wrap up the remaining paperwork.  With any luck, we’ll have documents posted later today.  Watch this space and your inbox for an update.

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The dollar tagged the secondary .886 (79.436) we mapped out last Friday [see: The Dollar’s New Digs]…

…as the EURUSD topped its Feb 1 highs on the way to a reversal at 1.3832…

…and, the USDJPY continued tracing out a pennant that is bursting at the seams.

It all plays well with our forecast.  The tell would be the sharp interim reversal by ES (today or tomorrow) at 1750-1755 that we mapped out yesterday.  The equivalent range for SPX: 1752-1760.

There’s no requirement that this reversal take place, but it fits our medium range forecast much better.  We often look to the USDJPY for confirmation, but today it’s the EURUSD that’s the most helpful.

continued for members…

We haven’t focused much on the euro lately, but the implications of the new interim high are potentially significant.

Note that this move negates the downside harmonic case that featured the July 2012 low as Point X.  So, given the correlation between the pair and equities, it’s rather bullish for equities.

The big question is whether EURUSD can break out of the big falling white channel it’s followed since 2006.

If so, the .786 or .886 are easily reachable (1.4319 or 1.4609) and the rising purple channel midline should be tested again.  If not, the party’s probably over at the .618 at 1.3832 and the yellow channel bottom will once again break down.

UPDATE:  10:00 AM

ES and SPX just reached the lower end of our target range — their respective 1.272’s.

For those shorting here, watch your stops.  SPX could have the purple 1.618 (1764.50) in mind.

A close-up:

DX is re-tagging the alternate .886 (to emphasize it’s importance?)  A sharp sell-off in SPX from 1760 to test the bottom of the white channel (say 1712-1716 by Thursday) should produce the pop in DX I’m expecting.

Best guess at this point, the top of the yellow channel at 80.292.

UPDATE:  3:15 PM

ES just reached the .886 of its 13-pt drop this morning.  If the 1754.59 interim top is going to hold, this is the time/place.

If 1754 holds, the minimum reversal should be to the red midline where it intersects with the white 1.272 at 1726.  A better target, IMHO, would be the purple .786 at 1708.19.

All this presupposes that DX remains above 78.725 — with a return to 79.436 being a good start.

GLTA.