Elliott Wave View: Dollar Index (DXY) Could Extend The Rally Higher

Technical analysis of Forex market

Short-term Elliott wave view in Dollar Index suggests cycle from October 28 low is in progress as a 5 waves impulse Elliott Wave structure. Up from October 28 low, wave 1 ended at 94.3 and pullback in wave 2 ended at 93.82. Wave 3 is currently in progress with subdivision as another impulse in lesser degree. Up from wave 2, wave ((i)) ended at 94.62 and pullback in wave ((ii)) ended at 93.87. Index then resumes higher in wave ((iii)) to 96.24, and dips in wave ((iv)) ended at 95.5.

Expect the Index to extend higher 1 more leg before ending wave ((v)). This should complete wave 3 in higher degree. Afterwards, it should correct cycle from November 4 low in wave 4 in larger degree before the rally resumes. Near term, as far as pivot at 95.5 low stays intact, expect the Index to continue to see further upside to end wave 3. Later, expect larger degree wave 4 pullback to also find support in 3, 7, or 11 swing for further upside. Potential support area for wave 4 can be measured later once wave 3 completes at 23.6 – 38.2 Fibonacci retracement of wave 3.

Dollar Index 45 Minutes Elliott Wave Chart