Elliott Wave Analysis: Bulls Taking Over USD Index; 96.50 Zone In View

Gregor Horvat

On USD index daily chart we are observing a big sideways pattern since start of 2015; it’s slow and overlapping price action which is a personality of a contra-trend movement that can be completed now. It was a flat correction in black wave IV; a three wave structure where final wave C should be made by five waves. Well, we can see a nice decline from November of 2015 counted in five legs, but as an ending diagonal. That’s a reversal pattern which may send price into a strong bullish mode in the second part of this year, after recent recovery above 95.22 and through the red trendline resistance. That said, be aware of more gains ahead.

USD Index, Daily

On the 4H chart, USD Index is on the sharp rise and has reached our minimum upward projections near 95.17 resistance last week, but bullish momentum is strongĀ  so there is still room for more strength ahead. An updated count shows an idea of an extended wave 3) which means that continuation towards 96 and 96.50 should be considered while market trades above 94.57 swing low. Keep in mind that USD index may have started a new big uptrend continuation after 12 months of a downward correction shown on the daily chart, so be aware of stronger buck across the board.

USD Index, 4 Hour

Source: www.ew-forecast.com