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