USD Index Forming A Bullish Reversal Pattern
Gregor Horvat | May 08, 2013 03:56AM ET
The USD index reversed higher last week from 81.32. This appears to be a first impulsive structure that is part of a larger and new bullish cycle for the dollar. As such, we expect much higher levels on USD index in the days and weeks ahead, especially if we consider that decline from 83.50 made clear three waves, which is a corrective price action, known as a zig-zag. Ideally, the market is now in 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'll look higher.
DAX 4H
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.
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