Dollar index has been in corrective mode after making the high of 114.77 last month. The fall from that high (marked as 1 in yellow – the second one) was clean abc which made me think that correction is over and we might start next impulse up. We did get some upside but in hindsight the whole move so far looks like complex correction W-X-Y-X-Z.
We seem to be in last leg (Z) of the correction which should be a 3 wave decline (abc). We are currently in wave a and a positive close from here might be an indication of b starting on the upside but it shouldn’t be too deep (111.5 max would be my estimate). From there, it should go down in final leg c of Z. If we go by wave equality (W=Z) then it points to around 108.5.
After Z, we’ll look for signs of next impulse up starting which should eventually take us beyond the October swing high of 114.77.
