Hi Trader,
Today we are not coming up with an Intraday Chart. This time we are looking at the Dollar Index on monthly chart, to get an idea about where the direction of it will be in the longterm. This bigger picture should help us in our trading decisions when it comes to pairs that correlate with DXY such as XAUUSD (Gold) or the Dow Jones Index.
Keep in mind, that my analysis is made out of technical tools. I'm not a fan of trading based on fundamentals even tho I am very interested in geo-economical events and I think that a large knowledge around economics is very important, no matter if you are a trader or not. My statement is: Technicals are way ahead of fundamentals. For example: R.N. Elliot calculated the bottom of the Dow Jones during the Cuba Crisis, not with the help of fundamental knowledge, but with the methods he built up during his studies.
That said, what is next on DXY?
As you know, I only use the Elliot Wave Theory for my analysis. According to this theory, we are currently in the a correctional zig zag, which occurs after the first cycle that consists out of 1-5 impulsive waves. Since we are currently looking at the monthly chart, it is unfortunately not possible for us to validate the individual waves, as we need smaller time units for this. But don't worry, I've checked them carefully. So you can assume that my count is correct.
Anyway, we are currently in the C wave, which is the last corrective wave in the Zig Zag. If we look at the smaller time units we can see that we are currently in the fourth wave of the C wave, which is why the price has risen in the last few weeks and months. This wave 4 can retrace up to 50% of the movement of wave 3. I have marked this 50% Fibonacci level for you. I don't assume we will touch it, but it is still possible. Should we actually hit this top, I assume that this will be the trigger for a series of massive sell-offs, which will give the Dollar Index new lows. Two zones are relevant for us: The C = A extension at 87,415 and the 162% extension at 77,757. The impact should happen in 2023-2024. I calculated this using Fibonacci timeframes.
As always, we look forward to your feedback!
This is no Financial advice.
RL from RT_Trading_
Today we are not coming up with an Intraday Chart. This time we are looking at the Dollar Index on monthly chart, to get an idea about where the direction of it will be in the longterm. This bigger picture should help us in our trading decisions when it comes to pairs that correlate with DXY such as XAUUSD (Gold) or the Dow Jones Index.
Keep in mind, that my analysis is made out of technical tools. I'm not a fan of trading based on fundamentals even tho I am very interested in geo-economical events and I think that a large knowledge around economics is very important, no matter if you are a trader or not. My statement is: Technicals are way ahead of fundamentals. For example: R.N. Elliot calculated the bottom of the Dow Jones during the Cuba Crisis, not with the help of fundamental knowledge, but with the methods he built up during his studies.
That said, what is next on DXY?
As you know, I only use the Elliot Wave Theory for my analysis. According to this theory, we are currently in the a correctional zig zag, which occurs after the first cycle that consists out of 1-5 impulsive waves. Since we are currently looking at the monthly chart, it is unfortunately not possible for us to validate the individual waves, as we need smaller time units for this. But don't worry, I've checked them carefully. So you can assume that my count is correct.
Anyway, we are currently in the C wave, which is the last corrective wave in the Zig Zag. If we look at the smaller time units we can see that we are currently in the fourth wave of the C wave, which is why the price has risen in the last few weeks and months. This wave 4 can retrace up to 50% of the movement of wave 3. I have marked this 50% Fibonacci level for you. I don't assume we will touch it, but it is still possible. Should we actually hit this top, I assume that this will be the trigger for a series of massive sell-offs, which will give the Dollar Index new lows. Two zones are relevant for us: The C = A extension at 87,415 and the 162% extension at 77,757. The impact should happen in 2023-2024. I calculated this using Fibonacci timeframes.
As always, we look forward to your feedback!
This is no Financial advice.
RL from RT_Trading_