USD Index Recovering - Elliott wave analysis
Mar 16 2020
Dollar index made a five-wave recovery within a higher degree wave A) from end of 2017, which was then in 2019 followed by a three-wave complex pullback into a wave B). This pullback is known as a *flat correction, a 3-3-5 pattern, which has found support slightly above the 94.5 area last week, despite emergency cut by the FED. Looks like that reason for current rise is because investors are looking for safety in cash. Actually, it's very hard to find good investment these day, especially if we consider that metals are now also turning down aggressively, with silver falling below $12. So even "safe havens" are sold now, meaning investors feel much more secure and stable in cash rather than stocks or any other assets. And it's all because of fear that may not stop so easily while coronavirus keeps spreading around the world.
Now, looking at the DXY with it's current price action, we think that even higher prices can be coming and ready to retest the 100 area, but in the meantime be aware of set-backs. 96.00/96.50 can be a nice support.
*A Flat is a three-wave pattern labeled A-B-C that generally moves sideways. It is corrective, counter-trend and is a very common Elliott pattern. In our case we labelled an expanded flat.
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USD Index, daily
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