In this article I’m going to discuss the complete move down from 103.80 level to 91 low in the Dollar Index (DXY).
As such the move down till 91 level in the Dollar Index looks to have completed 3 legs complete and can be looked at as either Waves 1)-2)-3) of a 5 legged impulse down or Waves A) – B) – C) corrective structure.
The more important thing is that there are 3 ways in which the movement form the 91 lows can be looked as :
- Three legs up from 91 level for Wave 4) of an Impulse.
- Three legs up from 91 for Wave X) after the A)-B)-C) correction.
- The start of a new Impulse in the Upward direction.
In either of the 3 scenarios we must see a 3 legged move in the upward direction which should achieve the Resistance level of 94.17 and if the move continues then the next level of 95.33.
Hence with this knowledge we can initiate small short term trades on the Dollar Index in the upside direction (As the short term view is bullish) with expected target levels as :
Target 1 : 94.17
Target 2 : 95.33
The stops in this case have to be based on Money Management principles as the Invalidation level in this case is quite lower at the 91.50 level with CMP at 93.07.
On the 4 hour time frame chart we can see that the current move up from the 91 level can already be seen as a 3 legged progression with the current price action in the Wave v of the 3rd leg.
The presence of an Expanding Ending Diagonal in Wave 3)/C) is also worth noting as this structure does not appear very often.
Get 1 month free entry to the private group and learn to trade using Elliott Wave Principles – My Video Course
To receive these updates at the earliest you can subscribe to my Emailing List.
Disclaimer – All content presented here is strictly for educational purpose, do read the complete site disclaimer before taking any action.