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USD-index reversed nicely higher last week from the 81.32 level, which appears to be a first impulsive structure that is part of a larger and new bullish cycle for the USD.

As such, we expect much higher levels on USD-index in days and weeks ahead especially if we consider that decline from 83.50 was made a nice clear three waves which is a corrective price action, called a zig-zag. Ideally, market is now in a wave 2) pull-back that will look for a support around 81.20.

Critical/invalidation level is at 81.32 as wave 2) must never retrace more than 100% of wave 1). So as long that level holds we are looking higher.

Current Trend/Sentiment

Directional Bias

Strategy

Sideways

 Bias Stay Aside

We favour long opportunities as long as 81.32 is not breached.

 

US Dollar Index Elliott Wave Analysis for technical trading May 8 2013

 

What is Zig-Zag?

A zig-zag is a 3-wave structure labeled A-B-C, generally moving counter to the larger trend. It is one of the most common corrective Elliott patterns.

Zig Zag Patterns

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