What's Potentially Ahead Of US Dollar Index (DXY)?

The 1H timeframe of the DXY index suggests the completion of a global corrective trend, which has taken the form of a triple zigzag consisting of five cycle waves w-x-y-x-z.

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

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

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

What's Potentially Ahead Of US Dollar Index (DXY)? - 2

Alternative scenario...

In an alternative scenario, the formation of a cycle triple zigzag is not yet fully completed.

Most likely, at the level of 104.69, the bearish cycle wave x was completed, which took the form of a standard zigzag â’¶-â’·-â’¸ of the primary degree. Then the market turned around, and an upward impulse price movement began in the initial part of the wave z.

The wave z can take the form of a zigzag â’¶-â’·-â’¸, and now a sub-wave â’¶ is being formed.

The entire wave z may complete its pattern near 116.80. At that level, it will be at the 61.8% Fibonacci extension of wave y.

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.