Making a Case for a Double Bottom Wave 2 Low in the US Dollar

Crude oil shot up more than 20% in response to the Libyan skirmishes this week. The dollar only sold off 2% to 7697 by Friday Feb 25, double bottoming just below the Feb 2 2011 year low at 7700. The trend is still bearish below Tuesday's high at 7839 and the two month average at 7870. While new move lows are possible, the RSI is showing positive divergence. Along with a potential double bottom forming around 7700, the Elliott Wave Count shows a potential wave 2:3 low is forming. If the dollar does rally from a Feb low around 7700, it will more than likely be a in response to a flight out of the Euro due to Spanish and Portuguese sovereign debt auctions in April.