Inverse H&S On USD Index Suggests More Weakness On


Markets gapped on Sunday against the USD after the U.S. President Barack Obama delayed a military strike against Syria by requesting authorization from an incredulous Congress.  From a technical perspective the wave patterns and direction did not change much.

We are bullish on USD. This means we expect weakness on the majors, such as EUR, GBP, CHF, AUD and even JPY. The reason is the following Inverse Head and Shoulders pattern on the USD Index 4-hour chart which already appears complete after a push above the neckline at the end of the last week.

This break is pointing for a stronger USD, ideally towards 83.00 where we can see the Head and Shoulders projection measured from head to neckline and then from a breakout point.

USD Index 4h Inverse Head and Shoulders pattern

dx sep 02 2013 Dollar Index big pivture elliott wave analysis technical chart

Moves following the completed Head and Shoulders pattern are usually very strong so while the market is moving higher we do not expect any larger corrective move, maybe only down to 81.80 where broken neckline (resistance) may turn to a support.

This will then be an ideal scenario for a downtrend continuation on the EURUSD which completed a five wave decline on Friday around 1.3170 but rally from there is only in three waves, so we assume it’s a zig-zag that will find resistance around 1.3250 zone, at former wave (iv).


eur sep 02 2013 intra technical elliott Wave analysis for currency trading forex

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About Author

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 His feature articles have been published on,, Action forex, Forex TV, Istockanalyst, ForexFactory,,, etc. He recently won the award on 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!


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