US Dollar Index Chart Technical Analysis – 08 Dec 2013
We had been expecting fireworks in the US Dollar Index chart as well as Gold with the release of the Non Farm Payroll data last Friday. In fact, we had been expecting the NFP to be the catalyst that would trigger a major bullish move for the DXY.
There was fireworks indeed with the DXY and Gold whipsawing, but only for a few minutes. After the effects of the NFP data tapered off, both the DXY and Gold spent most of the day flat.
Let us take a look at the US Dollar Index chart on the daily time frame to see what’s happening. As you can see, the DXY rose sharply but fell back and closed with a bearish doji.
The price action is still well within the green target zone and is also within the blue trend channel. Our primary Elliott wave count is displayed in the chart.
We have been following this count with an impulsive five wave move to the upside and the corrective wave that is in progress (in blue trend channel). This count remains as the primary count and we are still bullish biased for the DXY because this is a classic EW setup.
The price drop in the US Dollar Index chart is being supported by a small gap highlighted by the green line. It is also being supported by the bottom trend line of the corrective trend channel.
The MACD has now come back to the zero area and is still heading down. The bulls need to step up soon otherwise the bearish momentum will pick up.
US Dollar Index Chart shows that the DXY is at a key support area of a gap as well as the bottom trend line of the blue trend channel. This area must hold in order for the bulls to have chance of launching prices higher in a strong bullish move. If this area breaks, the bullish notion would need to be looked at again.