US Dollar Index Technical Analysis

The US Dollar Index has moved lower to 83.00 region as what we had been expecting. In the previous technical analysis of US Dollar Index, we said that the DXY is likely to head lower to 83.00 region. At the time, the DXY was at 83.70 and it actually went higher to 84.40 before turning down to 83.01. Here’s the 5H Chart of US Dollar Index which we had published at the time. As can be seen, we had been anticipating a flat formation with the final C wave in progress.

5 Hourly US Dollar Index Chart 25 May 2013

The Primary Count

Here’s the updated 5H Chart of the US Dollar Index. As can be seen in this chart, our notion of the flat correction is still valid. This gave us the target of 83.00 which has been reached. But looking at the wave structure of the C wave, there still is at least one more wave to go to the downside to complete the C wave. It could be a quick wave or it could be a slow ending diagonal.

5 Hourly US Dollar Index Charts 31 May 2013

Here’s the Daily Chart of US Dollar Index which tracks the move on the daily scale. The DXY is moving along exactly as per our earlier drawn path on the daily chart. We said that it will break the top trend line of the contracting triangle (in blue) to the down side and move to 83.00 region. That is exactly where DXY is at.

US Dollar Index Daily Chart 31 May 2013

At this juncture, we would need to wait for a clear higher high and higher low formation before making a bullish call.

The Alternate Count

The alternate count is equally important and in this count, we monitor the expanding triangle which has broken to the downside. Using the measured move method, the target for the US Dollar Index is right below 82.40 region. That is the reason why it is best to wait for a clear signal before making a trend change call.