Elliott Wave - EUR/USD, Dollar Index

Usd/Chf is still trading above the red trend line, mentioned on Friday; quite interesting while the Eur/Usd broke the trend line resistance pretty powerfully on the upside. If you will check out your two hour chart on the swissy you will notice a very ugly price structure in the last ten days. No clear trend at all, so its better to avoid this pair right now and wait until the breakout on the downside appears. Oil is still trading above the $70 support with some choppy moves on the one hour chart. Oil prices might be trading in the range for the whole of this week; maybe until Friday when the OPEC meeting gets underway.

Today we made an update on the Eur/Usd pair from Friday. We also looked on the U.S. dollar index chart as the bullish moves should slow down after a clear five wave move to the upside.

Today's Charts

Eur/Usd 4 Hour Clarity Range bound markets

The breakout point through the blue trend line appeared at 1.3450, which could be the key for the possible move to Fibonacci 61.8% pullback area of wave B. Traders that went long here should have already trailed their stops higher, especially because the market is trading in ranges on most currency pairs. The first resistance on the Eur/Usd chart is shown at the 1.3530 area, which is the high of the small range between 1.3342 and 1.3543 level. We should be very patient with our positions these days, maybe small profits could be the best decision as long as the markets are range bound. Calm before the storm maybe?

Dollar Index Bearish Intentions

We made a new wave count on the U.S. dollar index chart, updated from a few weeks ago, when we were looking for the possible a-b-c correction of the whole move up from 71.00. We have changed our wave count when the prices broke through the high of the red wave 3. That time was this high of the wave C which we changed it now to red wave 3. Prices continued quicklychigher after the correction in wave 4 was completed with the zig zag move. We saw a clear five wave move in the red wave 5, with the yearly top just above 83 level. The RSI indicator is also signaling for the lower prices in the next few trading days as the bearish divergence has been made with the last move up.

The basics Elliot ideas are that after a five wave move market should continue with the three waves of the corrective move. So, if the wave 5 is done with the divergence, then we can expect a break through the red trend line on the downside. This would also match perfectly the wave counts on Oil and Usd/Chf from last week. The oil wave count is looking bullish at the moment as the support around $70 holds. On the swissy we are also still watching very closely the 1.1286 level, as discussed on Friday.

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