USD Index Preparing for A Turn Lower? Early Weakness Gives a Hint – ELLIOTT WAVE
USD Index is trading bullish from end of 2017. We labelled a five-wave recovery from the lows, with the final piece of this rise being an Elliott wave ending diagonal. Potential top for this pattern can be near the 99.0/99.5 area, from where a three-wave turn towards 95.80/93.8 level can follow.
An EW ending diagonal is a powerful reversal pattern, that tends to push price into a sharp retracement once it fully develops. It can push the price towards the starting point of the pattern; in our case this is at 93.8.
USD Index, Daily
On the 4h chart of USD Index we see a clear drop from the 99.37 region, which is first evidence that wave c of 5 is completed, of an a-b-c rise, and that a minimum three-wave change in trend is in progress. We are tracking wave a/i, that can be followed by a temporary pullback as wave b/ii, before bears take price further down, into 96.9/95.8 region.
USD Index, 4h
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