Elliott Wave Analysis on USD Index Trading In A Probable Bullish Sequnce 

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On USD index daily chart we can see a big sideways pattern since start of 2015; slow and overlapping price action with a personality of a contra-trend movement that looks completed. We see it as a flat correction in black wave IV; a three wave structure where final wave C should be made by five waves. Well, we have seen a nice decline from November of 2015 counted in five legs, but as an ending diagonal. That’s a reversal pattern that already caused a strong bounce in May, so ideally recent sharp leg down was just a temporary pullback labeled as blue wave two within this ongoing uptrend.

That said we are now looking at a bullish scenario, with more upside to follow. Ideally corrective wave 2 has found its support around the 61.8 Fibonacci region and made new reversal higher into blue wave 3.

USD Index, Daily

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On the lower time frame we can see that USD index turned up on Friday and took out the upper trendline resistance of a downward channel that can be one of the most important bullish evidences. As such, we are looking at a completed A)-B)-C) decline now with new bullish impulse in progress. If that’s correct,t hen we can expect further gains this week up into wave 3 towards 96.50 region while market is above 94.70.

USD Index, 4H

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By Gregor Horvat


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