US Dollar Index Technical Analysis – 16 May 2013
In yesterday’s review of US Dollar Index we said that the bias is to the downside but US Dollar Index went up instead. When we published the article, US Dollar Index was trading at 83.81 and it went down a bit to 83.67 before heading higher to reach 84.22. It has since came back down to 83.88 as of this review.
Here’s the updated Hourly US Dollar Index Chart. We are maintaining our view of a downside bias for US Dollar Index. The move up has now very likely resulted in a completion of a five wave Elliott Wave impulsive move to the upside. Wave 1 and wave 5 are equal in length. Wave 3 is about 1.318 times wave 1. The divergence on the MACD is clearer now. In fact, the MACD has started to turn down. The completion of the impulsive move to the upside paves the way for a corrective wave to the down side. It could retrace anywhere between 0.38 to 0.62 times the move up. This gives us a target zone between 82.45 and 83.12.
The Alternate View is that there could still be one or two more small sub waves to the upside to go in order to complete wave 5.
We are of the the view the upside is very limited and are biased to the downside. A break of the blue trend line would give the first signal of a downside move.