DanV
Short

Dollar Index - BEARISH, Potential top could be in place

INDEX:DXY   U.S. Dollar Index
658 12 4
Earlier I felt that the April             high was the top I was looking for, however, after retracing it went on to make new high last week. This has RSI divergence from July 2012 high and current high, also with April             2013 high and the last high and what appears to be slightly higher high recently on Daily time frame. So potential triple divergence could at least markt intermediate high if the the final one.

Though, if you look at my longer term chart and my view if DXY             you will see that the recent high could be very significant. I will post this long term chart below.

If we do not get strong momentum move to the downside I will need to re-evaluate my entire analysis. But for now I am sticking to it as both from general technical analysis and from EW perspective it seems to fit

One to watch as it could give indication of all maor USD pairs direction for intermediate and longer term.
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Ive just noticed that the larger wave 4 is overlapping wave 1... that invalidates a count... am i missing something here? Wave 1 ended at 80 and wave 4 is ending around 85? Tell me im reading this incorrectly?
Reply
Hi. you are correct. Normally wave 4 should not overlap wave 1. But when you have Ending (falling wedge - which in this it is ) or Leading Diagonal ie in a contracting triangle but slanting down or up, you could have wave 4 overlap wave 1 with out breaching any rules. IN that case wave 3 cannot be the shortest is the only main rule that still holds. Hope this helps
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Monk DanV
Sure, I see it on the monthly chart... thanks bro :) I just didn't see the falling wedge... I reckon if I saw a much longer term chart it would have been more clear.
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Monk Monk
my only question is that the wave 4 hasn't touched the main trend line above yet at roughly 88... what are your thoughts on this?
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If we go on to make new top on DXY then EURUSD could retest 1.27 region before new impulsive move to the upside.
snapshot
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When I published the chart last weekend, I suggested that the DXY could have potential top. The decline since then does look strong, but the each swings on 4Hr seems to be abc ie minor 3 swings so far, with last one down to form a possible ending diagonal. If so then we could bounce around 82.80 area and possible go to 85.0 - 85.5 for new higher top. So in the updated chart below, we could follow Pink or continue higher for new top which increasingly looks more likely because of not having impulsive 5 internal wave counts in each swing of the decline so far. If we continue higher then we could form very bearish larger rising wedge since Sept 2012 low, on daily will see each swing to the upside is also of abc ie 3. In Rising wedge which is ending diagonal you could have each swings of 3 wave. The fall from there would be brutal in that the decline would retrace the entire rise from Sept low in less time than it took or will take to form the top. Here is the chart
snapshot
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great job !!!
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to me this has done iv (4th leg). see the RSI divergence which shows 3 of 3 completed. will do fifth - 84.80/85.00 before turning lower.
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DanV MOD Imran Khan
You could be right and I would keep that in mind, though I think on 2Hrly time frame (posted above) you can see that the channel break suggest that the cycle could be complete. If so then we have the high. Thanks for taking the time to view my analysis and commenting.
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agree! nice job! h4 up& day bear cross on monday
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