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Can TextBook Pattern Send The USD Higher?!

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June 16 2020
 
As you all know, the USD Index is bearish since mid-March when US stock market bottomed so investors are not looking for safe-havens at this time. But this may change now, if we consider that stocks recently moved into some technical resistance area with extreme positive sentiment, which already caused some new flows and drop in prices last week. At the same time we see USD Index testing very nice, potential support area at 96.50 where dollar may try to stabilize. Technically speaking, we see a three wave drop from March high, with a triangle in the middle labeled as wave B so current leg down must be wave C of a correction based on Elliott Wave rules and guidelines. If that's a correction then we know what follows next; a bullish reversal that can already be in early stages, but as always we want to see price moving into wave A zone, meaning move back above 98.50 that can be nice indication later that bulls are back. At the same time, it would be nice to see a five wave rally on a intraday chart, as this would make the bullish case even stronger. If price drops to lower levels, then watch out for 94.60 as next potential support.

USD index, daily


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