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Elliott Wave Analysis: Dollar Index Falls as S&P500 Rises

The US Dollar Index extended its losses and fell even lower yesterday, now through the channel support line which puts markets into an even more bearish mode than beforehand.

US Dollar Index Elliott Wave S&P October 17 2012
US Dollar Index Elliott Wave S&P

We believe that wave 5 is underway which should unfold in five waves towards 78.00 projected zone. Any short-term bounce will look for a reversal from a trend-line; as broken support becomes resistance.

S &P Elliott Wave Analysis October 17 2012
S &P Elliott Wave Analysis

We think that the S&P500 will continue higher and the reason is a three wave of a pull-back from latest 1474 high – which we know is a structure of a corrective movement. Ideally, that was wave 4 of an incomplete five wave rally (in red) wave 3.

If we are correct, then price will move back above 1480 in the next few weeks that will cause even more bearish pressure on the USD.

Gregor Horvat

Gregor Horvat

Grega Horvat Grega is based in Slovenia and has been involved in markets since 2003. He is the owner of Ew-Forecast, but before that he was working for Capital Forex Group and TheLFB.com. His feature articles have been published on 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 Ew-forecast he helps clients and educates them about the Elliott wave principle 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. EW-Forecast To be involved in the market effectively, you need the right guidance and resources, and our team can help you to achieve that. Our team is providing advanced informations about Elliott Wave theory in real time. The Elliott Wave Principle gives you a method for identifying the behavior of the markets and at what points the market is most likely to turn. We help new traders who are interested in Elliott Wave theory to understand it correctly. We are doing our best to explain our views as simple as possible with educational goal, because knowledge itself is power!