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Dec 142012
 

US daily 12 14 123 1024x576 Elliott Wave Analysis of the US Dollar Index (DX) by Sid from ElliottWavePredictions.com

Elliott Wave Analysis of the US Dollar Index (DX) by Sid from ElliottWavePredictions.com.  Click on the chart twice to enlarge.

The Dollar has weakened a bit further since the Fed announced Wednesday that they would double the amount of monthly printing of dollars moving forward, which begs the question: Is the Fed big enough and powerful enough, and do they have the prolonged political backing to be able to offset the super-strong and apparently strenghtening deflationary pressures? I think we’re about to find out.

The dollar has now retraced once again into the .66-.81 typical retracement zone for wave 4 of a diagonal, and is likely to close the week there. If the dollar weakens further through next week below pink 4 invalidation at 78.93, the alternate count shown will become the main, and a larger downside move is likely underway, with a common sense target of 76.17, where black 2 will have retraced .618 of wave 1 black. If however the Dollar strengthens by the end of next week without taking out pink 4 invalidation first, the main count of a leading expanding diagonal for blue wave 1 is still preferred.

Also worth noting, the “Weak Dollar = Strong Equities” correlation appears to have severed for now . .

Sid
http://ElliottWavePredictions.com

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