Eur/Usd, Dollar Index: Elliott Wave Analysis

Eur/Usd 'Correction'

4 Hour Chart trend: Short (Correction). Main price points: 1.3737, and 1.4049. Looking for: Wave IV

Eur/Usd is trading lower from 1.4049 highs as expected. It seems that the market is forming the first leg of a possible zig-zag correction in red wave IV. We are talking about wave a, which should be subdivided by five smaller waves before wave b gets on the way. We will be looking for another leg down, wave c, once the first two legs complete. The whole correction may find the bottom somewhere around 1.3737 support zone, where we will be looking for a bounce higher. Traders that are waiting on these moments should be very patient, as the corrective patterns are usually slow and choppy.

Dollar Index 'Move to 81.90'

4 Hour Chart trend: Long (Correction). Main price points: 79.81, and 81.90. Looking for: Wave iv)

Prices on the four hour dollar index chart are very bullish at the moment which means that we are on the right track with our wave count. Now the prices look to be trading in the first leg a, of a possible zig-zag correction that may be the case in the black wave iv). If our bias are correct then the market should be going higher, approaching 81.80 resistance area before any new short opportunities come back into the market. Stochastic is trading very near to the over-bought area but still looks very bullish; so there is no signs of a near-term intraday day high, yet.

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