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USD Index Elliott Wave and Technical Analysis – 12th December, 2015

I have only one bullish Elliott wave count for the USD Index.

New updates to this analysis are in bold.

US Dollar Elliott Wave Chart Weekly 2015
Click chart to enlarge.

The US Dollar has been in a bull market since July 2011. So far there is no confirmation of a trend change. The bull market should be assumed to remain intact until proven otherwise.

Ratios within intermediate wave (1) are: minor wave 3 is 24.98 longer than 2.618 the length of minor wave 1, and minor wave 5 has no Fibonacci ratio to either of minor waves 3 or 1.

Within minor wave 3, there are no Fibonacci ratios between minute waves i, iii and v.

Ratios within minute wave iii are: minuette wave (iii) has no Fibonacci ratio to minuette wave (i), and minuette wave (v) is 8.46 short of 0.382 the length of minuette wave (iii).

Within intermediate wave (3), minor wave 3 is 87.36 longer than 4.236 the length of minor wave 1.

Minor wave 3, within intermediate wave (3), shows strongest upwards momentum. MACD supports the Elliott wave count.

Within intermediate wave (3), minor wave 2 was a very deep 0.98 zigzag. Minor wave 4 is a shallow flat correction. There is perfect alternation between these two corrections which increases the probability of this wave count.

Draw a channel about intermediate wave (3) using Elliott’s first technique: draw the first trend line from the highs labelled minor waves 1 to 3, then place a parallel copy on the low labelled minor wave 2. So far this contains all of intermediate wave (3). The lower edge of this channel is proving useful in showing where downwards movement is finding support.

The US Dollar was in a sideways consolidation since mid March. During this sideways movement it is an upwards week which has strongest volume. This indicates that when the consolidation is complete an upwards breakout is more likely than downwards. So far, at this stage, it looks like price has now broken out of this consolidation upwards as expected.

A final support line is shown in cyan.

US Dollar Elliott Wave Chart Daily 2015
Click chart to enlarge.

Minor wave 4 was a flat correction. Minute wave b is a 105% correction of minute wave a, so this is a regular flat. Minute wave c is longer than normal for a C wave within a regular flat. There is no Fibonacci ratio between minute waves a and c.

The sideways consolidation turned out to be a leading contracting diagonal for minute wave i. This was followed by a relatively deep 0.52 flat correction for minute wave ii.

At 12,601 minute wave iii would reach 1.618 the length of minute wave i.

At 13,421 minor wave 5 would reach equality in length with minor wave 3.

This wave count expects a long extension for minor wave 5.

Within minute wave iii, the first wave for minuette wave (i) may now be complete, but it has a slightly truncated fifth wave. This slightly reduces the probability of this wave count and indicates caution. Risk management as always is the key to successful trading. This small truncation indicates traders should be careful to manage risk, if using this analysis for trading decisions.

So far minuette wave (ii) may be a complete quick shallow zigzag, at 0.48 the depth of minuette wave (i). If minuette wave (ii) continues any further, it should find strong support at the lower blue trend line copied over from the weekly chart.

The green base channel is drawn about minuette waves (i) and (ii). If minuette wave (ii) moves lower, redraw this channel. Draw the first trend line from the start of minuette wave (i) to the end of minuette wave (ii), then place a parallel copy on the higher price extreme within minuette wave (i) at the end of subminuette wave iii.

If price breaks above the upper edge of this base channel, then a third wave up would be confirmed. Along the way up, downwards corrections should find support at the lower edge of this channel.

TECHNICAL ANALYSIS

US Dollar Elliott Wave Chart Daily 2015
Click chart to enlarge.

At the weekly chart level, the strongest volume during the sideways range from early March to October 2015, was an upwards week. This indicated price should break out upwards. New highs in November are the result.

On 5th November price made a new high on an increase in volume. This was an upwards breakout, supported by volume.

It is consistently upwards days which show strongest volume since that breakout. This supports the trend. The rise in price is supported by volume and is not suspicious.

Short term, at the low of 10th December, there is slight divergence with price and RSI. On 10th December price made a new low below the prior short term swing low of 3rd December while RSI did not make a corresponding low. This indicates weakness in downwards movement and is very often accompanied by a trend change. In the short term, some upwards movement should be expected from here. This supports the Elliott wave count which labels this downwards correction as a complete second wave zigzag.

ADX is rising and above 15, the red -DX line is above the green +DX line, so a downwards trend is indicated by ADX. ATR disagrees: it is flat indicating no clear trend at this stage. With these two lagging indicators not in agreement with each other and not with the Elliott wave count, caution is advised. The picture here is unclear and may be resolved if price now moves higher for a few days as RSI indicates it will.

The series of blue and pink trend lines are my own technique which I strongly favour when trading. Along the way up, price may find support and resistance at these series of lines; these may assist to time entry points. The first of each series of trend lines is drawn from the price points labelled and parallel copies are placed higher up at various swing lows and highs.

On Balance Volume is bullish while it remains above the trend line.

Overall, the bullishness of volume, OBV and RSI should be favoured over the lagging indicator of ADX at this time. This indicates overall upwards movement from the USD. There will be corrections along the way up, and the third wave expected to begin does not necessarily have to start out quickly (although it may).

USD Index Elliott Wave and Technical Analysis – 15th November, 2015

I have only one bullish Elliott wave count for the USD Index.

New updates to this analysis are in bold.

US Dollar Elliott Wave Chart Weekly 2015
Click chart to enlarge.

The US Dollar has been in a bull market since July 2011. So far there is no confirmation of a trend change. The bull market should be assumed to remain intact until proven otherwise.

Ratios within intermediate wave (1) are: minor wave 3 is 24.98 longer than 2.618 the length of minor wave 1, and minor wave 5 has no Fibonacci ratio to either of minor waves 3 or 1.

Within minor wave 3, there are no Fibonacci ratios between minute waves i, iii and v.

Ratios within minute wave iii are: minuette wave (iii) has no Fibonacci ratio to minuette wave (i), and minuette wave (v) is 8.46 short of 0.382 the length of minuette wave (iii).

Within intermediate wave (3), minor wave 3 is 87.36 longer than 4.236 the length of minor wave 1.

Minor wave 3, within intermediate wave (3), shows strongest upwards momentum. MACD supports the Elliott wave count.

Within intermediate wave (3), minor wave 2 was a very deep 0.98 zigzag. Minor wave 4 is now complete as a shallow flat correction.

Draw a channel about intermediate wave (3) using Elliott’s first technique: draw the first trend line from the highs labelled minor waves 1 to 3, then place a parallel copy on the low labelled minor wave 2. So far this contains all of intermediate wave (3). The lower edge of this channel is again proving useful in showing where downwards movement is finding support.

The US Dollar was in a sideways consolidation since mid March. During this sideways movement it is an upwards week which has strongest volume. This indicates that when the consolidation is complete an upwards breakout is more likely than downwards. So far, at this stage, it looks like price has now broken out of this consolidation upwards as expected.

A final support line is shown in bright aqua blue.

US Dollar Elliott Wave Chart Daily 2015
Click chart to enlarge.

Minor wave 4 did not complete as a triangle, as last analysis expected, but was over sooner as a flat correction. Minute wave b is a 105% correction of minute wave a, so this is a regular flat. Minute wave c is longer than normal for a C wave within a regular flat. There is no Fibonacci ratio between minute waves a and c.

The sideways consolidation was not a fourth wave triangle, which was what I had expected. Instead, the sideways consolidation turned out to be a leading contracting diagonal for minute wave i. This was followed by a relatively deep 0.52 flat correction for minute wave ii.

At 13,062 minute wave iii would reach 2.618 the length of minute wave i.

This wave count expects a long extension for minor wave 5.

No second wave correction may move beyond the start of its first wave below 11,855 within minute wave iii. Minuette wave (ii) should find strong support again about the lower edge of the blue channel copied over here from the weekly chart.

USD Index Elliott Wave and Technical Analysis – 25th September, 2015

I have only one bullish Elliott wave count for the USD Index.

US Dollar Elliott Wave Chart Weekly 2015
Click chart to enlarge.

The US Dollar has been in a bull market since July 2011. So far there is no confirmation of a trend change.The bull market should be assumed to remain intact until proven otherwise.

Ratios within intermediate wave (1) are: minor wave 3 is 24.98 longer than 2.618 the length of minor wave 1, and minor wave 5 has no Fibonacci ratio to either of minor waves 3 or 1.

Within minor wave 3, there are no Fibonacci ratios between minute waves i, iii and v.

Ratios within minute wave iii are: minuette wave (iii) has no Fibonacci ratio to minuette wave (i), and minuette wave (v) is 8.46 short of 0.382 the length of minuette wave (iii).

Within intermediate wave (3), minor wave 3 is 87.36 longer than 4.236 the length of minor wave 1.

Minor wave 3, within intermediate wave (3), shows strongest upwards momentum. MACD supports the Elliott wave count.

Within intermediate wave (3), minor wave 2 was a very deep 0.98 zigzag. Minor wave 4 may be unfolding as a very shallow triangle which would exhibit perfect alternation.

Draw a channel about intermediate wave (3) using Elliott’s first technique: draw the first trend line from the highs labelled minor waves 1 to 3, then place a parallel copy on the low labelled minor wave 2. So far this contains all of intermediate wave (3). Minor wave 4 may find support at the lower edge of this channel if it gets that far.

The US Dollar has been in a sideways consolidation since mid March. During this sideways movement it is an upwards week which has strongest volume. This indicates that when the consolidation is complete an upwards breakout is more likely than downwards.

A final support line is shown in bright aqua blue.

US Dollar Elliott Wave Chart Daily 2015
Click chart to enlarge.

The daily chart shows the whole structure of minor wave 4 which may complete as a triangle, as expected, but it is also possible the triangle may be invalidated and the structure may morph into a combination.

Minute wave d may not move beyond the end of minute wave b above 12,096 for the triangle to remain valid. This invalidation point is not black and white because for a barrier triangle D may end slightly above B, as long as the B-D trend line remains essentially flat.

Minute wave e may not move beyond the end of minute wave c below 11,867. This point is black and white for the triangle. If it is breached, then minor wave 4 may be morphing into a combination.

I would not consider the possibility that minor wave 4 could be over at the low labelled minute wave a because it would not exhibit alternation with minor wave 2; they would both be zigzags.