DXY (Dollar Index) Update... nearly there!

For basic information and a solid grounding in Elliott Wave, look here:

www.babypips.com/lea.../elliott-wave-theory

I truly think that babypips.com is amazing, by the way. I'm not affiliated with them. You can look up DXY (The USD Index) on there as well if you're not sure what it is:
www.babypips.com/lea...-is-the-dollar-index

Elliott discovered that price movements are a natural process when enough participants are involved. Natural processes have been shown to exhibit certain characteristics, such as adherence to Fibonacci ratios, which form part of Elliott's theory.

For years I dismissed Elliott without really looking at it. I'm glad I changed my mind, that's for sure.

Let's start at the weekly timeframe

When trying to apply Elliott Wave it's always best to start as far out as you can. The monthly is a bit confusing in DXY, so I am showing the weekly instead.

The Dollar Index Elliott Wave on a weekly timeframe:


Those of you new to Elliott may be asking why after the part labelled (4) we had a fall followed by a big pullback. After all, if we are in a downtrend 5 what is going on?

The answer is that wave 5 will have an internal 5- wave structure that looks the same. It's best described with another picture:

The Dollar Index Elliott Wave on a daily timeframe


So, the pullback is to be expected, and in fact it adds to the evidence that our original assumption is correct. Additionally, note how the (white) 3-4 move will likely pull back to the same support, which will have become resistance. It adds to a beautiful picture.

Let's zoom in a little, and what do you know? There is a 4-hourly wave within a wave! And we are in the 1-2 pullback for that right now:

The Dollar Index Elliott Wave on a 4 hour timeframe


What is the point of all this?

Well. Non-Farm Payrolls are on Friday. I predict that the Dollar will likely rally either before or after, then fall. It's funny how news fits into a news-blind method, right?

I'm waiting for this pullback to finish so I then know that the Dollar is going to be falling for a fair while. I'll be then getting long EURUSD and Gold.

It's all about patience.

Have a good week!