Elliott wave analysis of the Dollar Index.

S&P Elliott wave count update
March 13, 2013
Elliott wave analysis on SILVER
March 15, 2013

The Dollar Index is surprisingly rising along with SPX. The relationship between these two is usually inverse. But recently we observe a rise in both. The Dollar index was included in a previous post where we noted the appearance of a pattern.We clearly indicated in our previous post that it was important for the advance of the pattern, for the neckline support to break. Instead, the neckline was not broken and the Dollar index has moved upwards breaking all of our resistances. The first bullish signal was the bounce of the HS neckline. Next sign was given when prices broke above the and the pitchfork resistance. Now we can see 5 waves up already completed or at least near their end. At the same time, EURUSD, the biggest component of the Dollar Index was trending downwards as posted several times here and in our members newsletters.

DXY

The index as shown above is still in a bullish trend. Breaking below 82.20 will start a corrective move towards 81,40 at least. Important support stands at 80.

eurusd2h

EURUSD as shown above is still trading inside the red downward sloping channel. However we feel it might be time for a reverse. First signal will come if prices push above 1,2985. Second signal will be when prices break outside of the red channel. Resistance stands at 1,30-1,3050. Our newsletter sent yesterday to members also captured another great setup in EURUSD as can be seen in the picture below.

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For more help trading these instruments, don’t hesitate to contact me. As always, thank you for taking the time to catch up on my thinking.

A technical analysis term used to describe a chart formation in which a stock's price:

1. Rises to a peak and subsequently declines.
2. Then, the price rises above the former peak and again declines.
3. And finally, rises again, but not to the second peak, and declines once more.

The first and third peaks are shoulders, and the second peak forms the head.

Head And Shoulders Pattern

A chart used in technical analysis that shows support and resistance, and momentum and trend directions for a security or investment. It is designed to provide relevant information at a glance using moving averages (tenkan-sen and kijun-sen) to show bullish and bearish crossover points. The "clouds" (kumo, in Japanese) are formed between spans of the average of the tenkan-sen and kijun-sen plotted six months ahead (senkou span B), and of the midpoint of the 52-week high and low (senkou span B) plotted six months ahead.

Alexandros Yfantis
Alexandros Yfantis
Fascinated by financial markets, studied International Securities Investment and Banking in the UK, works as a Portfolio Manager in Greece and runs a technical analysis website. Enjoys travelling and spending time with his family and preparing for the black belt in Korean Karate.