The Dollar index is trapped in a contracting triangle pattern since March of 2015 when it made a high at 100.40. We are now at the final stages of the triangle pattern with the most probable outcome to be an upward breakout to new highs.
Every part of the up or down moves in the Dollar index consists of three waves confirming the fact that we are in a corrective stage. We are now at wave D up and we soon are going to see it complete. Then a wave E down will come that should not break below wave C low. This will most probably complete the entire triangle pattern and then we should see a resumption of the up trend that started in May of 2014.
Resistance at 100.50 is very important and bulls should not be too anxious to front run any possible upward breakout. The Dollar index has reached the 61.8% Fibonacci retracement of the decline from 2002 to February of 2008. This is important long-term resistance. As important support is the low of wave A near 92. A break below this level will make me believe that the market is reversing for much lower levels even towards 82.
Patience is needed now as over the coming months a new trend will start. No need to front run or guess. Just follow the signals as we are at an important junction. Thank you for taking the time to catch up on my thinking.