USD Index Could Break Out Of A Triangle Very Soon-Elliot Wave
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Jan 21 2013
At the start of January we discussed about two possibles with members regarding the pattern on Dollar Index in wave (B) position; we mentioned flat or triangle. Well, looks like triangle appears to be the case now after only three wave rise from 79 to 80.90 level followed by another tree wave fall to 79.30 which we think it was a D) wave. As such, pattern could be in final stages now so be aware of a reversal lower from around 80.10-80.60 resistance area.
On the 4h chart we can see that USD index recovered nicely from wave D) swing low. Notice that pull-back is in three waves that represents wave E), final leg of a triangle pattern. Prices also reached 50% retracement area so do not be surprised if market will turn sharply lower in this week. An impulsive weakness back to 79.57 will open the door for much lower levels. In such case traders may take advantage of stronger EUR. Invalidation level is at 80.90; as long market trades below this figure we will look lower.
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