(Note: because DXY index no longer has realtime data, I use USDOLLAR instead.)
I literally broke my head trying to fugure out what DXY might be doing these last weeks and what the outcome could be. What's labelled on the chart is what I think the market is trying to tell us.
We seem to be tracing a complex WXY structure with W flat wave completed on May 14th, and X wave being still in progress!
Within X wave we have completed a nice impulse on June 1st, then had a zigzag correction A-triangle B-C, and currently are running an impulsive C up. Note that the speed of C is lower than A, which is normal for ABC corrections. Assuming A=C we are supposed to hit 12150 in USDOLLAR terms (not sure what DXY value that is).
Then we will need to go down in Y wave, and multiple alternatives with respect to the specific shape of that wave may exist. If wave X ends at or near the beginning of wave W, then a flat setup is likely and Y could well be an impulse or an ending diagonal. Otherwize we are likely to see a zigzag (as an alternation to W flat).
The timings of such long-term moves are always quite vague but as an initial assumption I would propose equal duration of W, X, and Y. Based on that assumption we are likely to complete the whole structure in 1st half of September, which coincides with the end of summer holidays. By then the market will be ready for some serious movements and this is when I think wave 5 of downward movement in EUR (and ascending wave 5 in DXY) may start.
I literally broke my head trying to fugure out what DXY might be doing these last weeks and what the outcome could be. What's labelled on the chart is what I think the market is trying to tell us.
We seem to be tracing a complex WXY structure with W flat wave completed on May 14th, and X wave being still in progress!
Within X wave we have completed a nice impulse on June 1st, then had a zigzag correction A-triangle B-C, and currently are running an impulsive C up. Note that the speed of C is lower than A, which is normal for ABC corrections. Assuming A=C we are supposed to hit 12150 in USDOLLAR terms (not sure what DXY value that is).
Then we will need to go down in Y wave, and multiple alternatives with respect to the specific shape of that wave may exist. If wave X ends at or near the beginning of wave W, then a flat setup is likely and Y could well be an impulse or an ending diagonal. Otherwize we are likely to see a zigzag (as an alternation to W flat).
The timings of such long-term moves are always quite vague but as an initial assumption I would propose equal duration of W, X, and Y. Based on that assumption we are likely to complete the whole structure in 1st half of September, which coincides with the end of summer holidays. By then the market will be ready for some serious movements and this is when I think wave 5 of downward movement in EUR (and ascending wave 5 in DXY) may start.
