Elliottician_SamRoy

USD Index- Bigger Picture

INDEX:DXY   U.S. Dollar Index
As almost all major USD pairs correlate with USD index, either directly or inversely, prediction of direction of $ index is important to keep in mind bigger picture for all those major pairs.. Looks like we are in correction right now, that can stay for more time before bulls come in the game.
Comment: Going nicely according to the analysis. Wave-iv looks like completed. DXY ready to fly to complete wave-v in order to finish 3rd wave rally...
Happy trades:)
Comment: Two wave counts there. Either it is ABC which looks like done or it is 12345 where its time for corrective wave-4 to show up!
snapshot
Hi there,
I am comparing your latest audusd graph with this dxy graph and the expected inverse relationship is not clear to me at this scale.
There is one major modifier to the relationship and that is iron ore price effect on the ozzie.
I wonder if you could do an update of the dxy graph a the same time scale as recent audusd graphs so I can see more clearly what is going on.
Thanks
John
Reply
@johnm600, Dear, actually i dont believe in correlations. I have updated both graphs as the picture i see for AUDUSD and also for Dollar index. I hope it helps :)
Reply
JohnMorey Elliottician_SamRoy
Hi Sam,
Thanks very much for the updates, which I appreciate and examine regularly.

When I said the Aussie is sensitive to iron ore price I should have included the gold price, both of which have risen greatly since the end of the 2016.
This could affect the inverse correlation that I expect.

There is a big grin on my face as I read your note on correlations from a year ago, above.

Cheers
John
+1 Reply
@JohnMorey, Yes you are right. Actually I used to trade and analyse the correlations on intraday basis but man most of the time i came burned and my account used to suffer losses. What I hv learned over year is that these correlations are useless to consider while trading on timeframes like intraday, Daily, Weekly but could be useful on higher timeframes for investment purposes. Yes i consider correlation of $ pairs with $ index but only on higher timeframes where we dont trade but invest but for trading purposes, I really dont suggest using correlations, it can be very very misleading.. :)
Reply
@JohnMorey, http://www.elliottwave.com/Metals/Precious-Metals-Through-the-Lens-of-the-Elliott-Wave-Principle
Watch this (2nd) video from EWI's senior analyst talking about correlations. These people made me quit using correlations and yes they are right! :)
Reply
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