Saxo Market Call on April 17th - US yields, Fed, US dollar, crude oil and more

US Dollar Index (DXY) - Let's Look At Possible Scenarios

The current chart of the DXY index shows the completion of the global corrective trend, which took the form of a triple zigzag consisting of five main cycle waves w-x-y-x-z.

Thus, the market is currently at the stage of reversal, that is, if this hypothesis is confirmed, the formation of the initial part of a new bearish trend may begin. 

It is assumed that the bears are starting to build the first impulse sub-wave of the potential standard zigzag Ⓐ-Ⓑ-Ⓒ. The end of the impulse Ⓐ is possible just below the minimum of 104.63, which is marked by a minute fourth correction.

US Dollar Index

An approximate scheme of possible future movement is shown on the chart. 

Let's look at another option in which the formation of a cycle triple zigzag is not yet fully completed.

Most likely, the bearish cycle wave x was completed not so long ago, which took the form of a standard zigzag Ⓐ-Ⓑ-Ⓒ of the primary degree. After that, an upward impulse price movement began in the initial part of the wave z.

The wave z may take the form of a zigzag Ⓐ-Ⓑ-Ⓒ, where the first impulse and correction are already completed.

The entire z wave may complete its pattern near 114.41. At that level, it will be at the 50% Fibonacci extension of wave y.

Saxo Market Call on April 17th - US yields, Fed, US dollar, crude oil and more

Jing Ren

Jing-Ren has extensive experience in currency and commodities trading. He began his career in metal sales and trading at Societe Generale in London. Later on he worked as a senior analyst within the FX brokerage industry where he developed strategies in trading and risk management. With solid understanding of market dynamics he founded Wensfer to offer research and asset management services.