The US dollar index might have carved a lower high around 96.50 mark on Tuesday. The index dropped through 95.80 levels on Wednesday before finding some support. A break below 95.45 will accelerate further towards 93.00 in the next few weeks.
The index has carved an Evening Star bearish pattern on the daily chart after hitting 96.88 highs earlier. Also note that Elliott Channel resistance has been tested around 96.70-88 mark before reversing lower. If the above structure holds well, bears are expected to be back in control soon.
The US dollar index had dropped between 104.00 and 89.20, subdividing into five waves. The impulse drop has been marked as Wave (1) on the daily chart here. The subsequent rally has been corrective flat (3-3-5) towards 96.88 mark, which is potential Wave (2).
Also note that Wave (2) has travelled up to fibonacci 0.50 retracement of Wave (1), a general guideline of the Elliott Wave principle. If the above proposed structure holds well, the US dollar index should produce a sharp reversal lower toward 89.20 and further.
Traders might be inclined to initiate fresh short positions between 96.00 and 96.30 levels from here. Risk remains above 97.00 while potential target is below 93.00 mark at least.
Finacademy Technical Team
Gold prices dropped through $1773 lows on Thursday before finding support again. The drop from $1793 was in-line with price action of a gartley.
USDJPY is soon approaching a formidable resistance zone around the 114.40-50 mark. The currency pair has been carving a corrective rally since 112.50 lows.
Gold prices dropped sharply to $1770 on Tuesday completing a potential zigzag correction that had begun since $1793 earlier.