Breaking the 3rd DXY – Wave

Our weekly guest blogger briefs us that according to the Elliott wave principle the fourth wave of the DXY is

avi gilburtABOUT THE AUTHOR: Avi Gilburt is a widely followed Elliott Wave technical analyst and author of ElliottWaveTrader, a live Trading Room featuring his intraday market analysis (including emini S&P 500, metals, oil, USD & VXX), interactive member-analyst forum, and detailed library of Elliott Wave education.

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Last weekend, I was questioning whether wave v of (3) of 3 has finally topped. The jury is still out, as it is still possible for the market to reach one more higher high before wave (4) begins.

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DXY monthly Chart Source: www.elliottwavetrader.net/
DXY Monthly Chart
Source: www.elliottwavetrader.net/

This past week, the market bottomed exactly at the level I noted in our Live Video sessions during the week. As often as I see this happen, it still amazes me how markets abide by these Fibonacci extensions, quite often to the penny, such as we saw this past week in the DX. And maintaining support at that low can still allow the market to push higher to complete a final 5th wave extension in this wave v of (3).

However, as you can see from the attached 144 minute DX – futures – chart, should we break down below last week’s low, it is a clear indication to me that wave (4) is in progress, which will likely be taking us down to the 90-92 region.

DXY Charts  Source: www.elliottwavetrader.net/
DXY 144 Minute Chart Source: www.elliottwavetrader.net/

 

But, please allow me to remind you that such a drop would likely only be a precursor to the market setting up to target levels over 100 for wave (5) of 3.

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