ABOUT 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.
It seems like such a distant memory by now. Back in May of 2014, the great majority of the Forex market was looking for the collapse of the US dollar. I am looking for a rally from the 79 level. And, not only did the dollar rally as we expected, the dollar simply continued in its very bullish posture, which caused us to raise targets based upon the internal wave structure.
My longer term perspective also maintained that the dollar bottomed in 2008. And, it does not seem as though the dollar is going to see a significant top until it attains at least the 106-111 region. Sure, we are going to see corrective pullbacks before getting to the higher targets. But, this past week has gone a long way to solidify the long-term bullish posture of the US dollar.
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As far as the extensions we have seen in the dollar of late, I have noted for the last several weeks that should it break through the 1.00 extension at 90.25, our next target is likely the 1.236 extension at just below 93.
This past week, the DXY topped at 92.53. And, amazingly, the upside still does not yet look complete. But, as long as we remain below the 1.236 extension, I am going to be looking for a wave iv corrective pullback.
Alternatively, should the DXY continue in its current trend strongly through the 93 level, the next region of resistance is at the 94.50 level, which is the 1.382 extension. However, if such a strong move through the 93 region is seen, then it means my wave count is off by one degree, and we are already in wave v of wave (3), with a minimum target in the 96 region.
See my wave counts on the DXY here in this chart:
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