Dollar Index: Bearish Triangle

Jan 13 2013

A week back we discussed about two possibles on Dollar Index in wave (B) position, we mentioned flat or triangle. Well, looks like triangle appears to be the case now after only three wave rise from 79 to 80.90 level. Triangles are five wave patterns, so be aware of a short-term bounce in wave E) towards 80.00 zone before whole structure is complete. Anyhow, we expect a fall beneath 78.50 while 80.90 resistance is in place.

Contracting triangle
 

• structure is 3-3-3-3-3 • each subwave of a triangle is usually a zig-zag • wave E must end in the price territory of wave A • one subwave of a triangle usually has a much more complex structure than others subwaves • appears in wave four in an impulse, wave B in an A-B-C, wave X or wave Y in a double threes, wave X or wave Z in a triple threes