Weekly US Dollar Index Technical Analysis
The US Dollar Index is in consolidation as the movement for the past week has been mostly sideways in nature. This is expected behavior after a solid surge from 81.37 to where its at now at 84.00 region. Here’s the updated 5 Hourly US Dollar Index Chart. This chart shows the most probable Elliott Wave pattern that is unfolding.
We believe that a flat formation is panning out. As we know, flat is a 3-3-5 a-b-c configuration and so far the a-b portion has been completed. The c wave is in progress and c waves are typically 1.62 times wave a. This gives us a target of 83.00. The 83.00 level is also bottom of a previous consolidation region and can be expected to provide support once again.
Here’s the daily US Dollar Index Chart which shows the waves in a larger time scale. The contracting triangle that we have been following for a few months now is clearly depicted here. We believe that the final wave of the triangle truncated and the US Dollar Index surged upwards with that event. The final wave is labelled as wave [e].
Now that the triangle has been broken to the upside, this gives the US Dollar Index support for further upside. The price is currently being supported well by the top triangle trend line. We believe that the trend line would be broken to the down side to 83.00 region as per the analysis of the 5H US Dollar Index Chart. Thereafter, the US Dollar Index is anticipated to head to 86.40 region.
The medium term bias for US Dollar Index is to the upside with a short term correction taking place to the downside.