$DXY US Dollar Index H4, Daily, Weekly and Monthly

General overview for 09/12/2014:

The first small grey chart is a 50 years old monthly candlestick data for US Dollar index where the wave development has been labeled. As we can see, there is unfinished multi-year cycle to the upside, labeled as wave (b) green (decade degree):

Based on that assumption, the weekly charts current labeling is following the grey chart and the first two impulsive waves has been labeled (1 and 2). Then there is wave 1 ( Leading Diagonal) and complex and time consuming wave 2. There is first indication that the wave of wave 1 has been completed and now the market should enter the corrective cycle in wave 2:

Daily chart shows five waves impulsive wave progression from the DEMAND area that might have just hit the target projection of 61%Fibo at the level of 89.30. IF it is so, then the market should enter the corrective cycle now:
On intraday time frame H4, we can see that the market is slowly coming down to test the internal golden trend line and if this line is violated, then the level of 88.19 will be tested soon. Please notice
the Ending Diagonal structure in wave 5 of wave 5 (I,II,III,IV,V) and diminishing momentum resulting in a Bearish Divergence:
89.59 – Swing High
89.30 – 61%Fibo Target
88,74 – Golden Trend Line Support
88.19 – Bullish Zone Support
87.17 – Neutral Zone Support
86.77 – 87.17 – Supply Breakthrough Zone
Trading recommendations:
As long as the high at the level of 89.59 is not violated, the chances are high, that the market has entered/is about to enter a corrective cycle. This might result in near-to-mid term SELL trade opportunity on pairs: USD/JPY, USD/CAD, USD/CHF, USD/PLN, USD/ZAR, USD/TRY. Moreover, ther might be some forex pairs that are in good place to BUY now: EURUSD, GBPUSD, AUDUSD, NZDUSD, 
Overall good opportunity to do some near-to-mid term currency basket trading.

About the author

Sebastian Seliga

Aktywny trader, analityk, ekspert metod inwestycyjnych bazujących na teorii fal Elliott'a, geometrii Fibonacciego i nie tylko.

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