U.S. Dollar IndexShort
Investors finally realizing that inflation is not "transitory"?
From a technical perspective, DXY broke below a very critical weekly trendline and retested it now with a big ABC correction (wave 4) in order to continue its way down for wave 5.
Additionally, the 94.70 critical level is also the previous wave IV of wave 3, and according to the Elliott Wave Principle, the previous wave 4 is known to be a very critical level, thus not breaking above 94.70 with big wave 4 will signal further downside continuation for wave 5.
Using the Fibonacci Extension, our targets for wave 5 are the 61.8% Fibonacci Extension level at 87.66 and the 70.2% level at 86.70. Breaking these levels will push the dollar for more downside to retest new lows.
For this scenario to become invalid, we must see a break above the weekly trendline and the previous wave 4, or else we will stay bearish on DXY technically and fundamentally.
Additionally, the 94.70 critical level is also the previous wave IV of wave 3, and according to the Elliott Wave Principle, the previous wave 4 is known to be a very critical level, thus not breaking above 94.70 with big wave 4 will signal further downside continuation for wave 5.
Using the Fibonacci Extension, our targets for wave 5 are the 61.8% Fibonacci Extension level at 87.66 and the 70.2% level at 86.70. Breaking these levels will push the dollar for more downside to retest new lows.
For this scenario to become invalid, we must see a break above the weekly trendline and the previous wave 4, or else we will stay bearish on DXY technically and fundamentally.
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