US Dollar Index might be drifting sideways for now, but bulls are looking to push prices higher towards 93.50 mark at least. The index would complete 5 waves impulse rally if prices reach 93.50 and 94.00 mark in the near term.
US Dollar Index had earlier dropped through 89.50 levels, proposed larger degree Wave (2) of 5 wave rally since 89.20 lows. Since then, bulls have remained in control and pushed prices higher through 92.75 mark before drifting sideways.
Looking at the wave structure since 89.50 lows, US Dollar Index has managed to carve Waves 1, 2, 3 and potential 4 around 90.40, 90.00, 92.70/75 and 92.30 respectively. If correct, the index might be already preparing for Wave 5 rally towards 93.50 and 94.00 levels from here.
Also note that Wave 3 was an extension and iii of 3 was also extended. High probability remains for a Wave 5 rally to resume soon towards 93.50 and higher. Alternately, Wave 4 might drop through 91.50 before terminating.
Either way, US Dollar Index outlook continues to remain bullish towards 93.50 at least. We can expected a corrective drop thereafter, dragging lower towards 90.50 levels before resuming a larger degree Wave (3).
Finacademy Technical Team
USDJPY could be progressing into a counter trend rally toward 114.30-50 zone in the next few trading sessions.
Gold dropped to $1770 mark on Tuesday before finding some support. The yellow metal is still testing its intermediate trend line support connecting $1721 and $1758 levels respectively.
The US dollar index carves a meaningful top around 96.88 mark over the last week. The index reversed sharply on Friday confirming a bearish Evening Star candlestick pattern on the daily chart.