USD Index Looks For Bullish Reversal: Elliott Wave
We believe that USD Index has now turned bullish with impulsive rise from 79.00 and breakout out of a downward channel. This breakout is important sign for a change in trend, even if just temporary. Based on a big picture with a triangle, we think that rise from 79.00 is start of a wave D that will unfold in three legs. If that is the case then current downward move is just a wave (B) correction that could stop around 78.6-61.8% Fibonacci retracement area. As such, move up in wave (C) could start unfolding in the second part of December.
On 4h Chart USD index found support last week at 79.72 from where we have seen some nice upward price action. Notice that price bounced higher from 61.8-78.6% retracement area which is ideal Fibonacci zone for corrective legs. With that said, we see chances for USD Index to turn bullish but we need to see further rise and daily close above 80.47 where any different bearish scenarios would become invalid. In that case we would be even more confident that USD is heading higher. In the meantime we need to keep an eye on current 79.72 low; if broken then we may see a retest of October lows.
Written by www.ew-forecast.com
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Author: Gregor Horvat
Gregor Horvat
www.ew-forecast.com
Grega is based in Slovenia and has been involved in markets since 2003. He is the owner of www.ew-forecast.com, but before that he was working for Capital Forex Group and TheLFB.com. His feature articles have been published on: SafeHaven.com, FXstreet.com, Thestreet.com, Action forex, Forex TV, Istockanalyst, ForexFactory, Fxtraders.eu, Insidefutures.com, etc. He recently won the award on FXStreet.com for Best Forex Analysis in 2016. At www.ew-forecast.com he helps clients and educate them about the Elliott wave prinicple and how to label and track unfolding patterns in real time. His approach to the markets is mainly technical. He uses a lot of different methods when analyzing the markets such as candlestick patterns, MA, technical indicators etc. His specialty however is Elliott Wave Theory which could be very helpful especially if you know how to use it in combination with other tools/indicators.
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