USD index has turned down recently, into a new correction that should be made by three waves. We are tracking wave (4) which is part of an ongoing motive structure in big black wave V that could reach levels around 103-104 in the months ahead. Invalidation level is at 93.83; as long this one holds, the trend is up.
USD Index, Daily
An overlapping decline since 2013 looks like an ending diagonal pattern. That’s a very big and important reversal structure which is telling us that the bearish trend can be near completion if we consider that metal has already made three needed sub waves down within a black wave 5. We however still need an impulsive reaction back to around 1191 figure before we can call a “low in place”. Ideally this bounce will occur in 2016.
An ending diagonal is a special type of pattern that occurs at times when the preceding move has gone too far too fast. A small percentage of ending diagonals appear in wave C position of A-B- C formations. In all cases, they are found at the termination points of larger patterns, indicating exhaustion of the larger movement.
An Ending Diagonal Pattern:Get the 5 most predictable currency pairs