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