The US dollar despite the strong start of the week has turned down aggressively today near Friday lows after the Non-Farm Payrolls numbers were announced. The is my technical and wave analysis on the dollar index. Technically speaking USDX has broken out of the downward sloping channel on Friday and is now pulling back to back test this break out area and touch the upper channel boundaries again.
The dollar index has also reached the 61.8% retracement of the rise from the lows on May 6th to the highs on May 11th. The dollar index according to my wave count has also made 5 waves up and until now it shows 3 waves down. What I expect next is an upward reversal from the 61.8% retracement.
On a weekly basis I believe we have finished a 3 wave correction from the highs at 100.40. This is a text-book A-B-C correction.
The dollar index has bounced off the kijun-sen (yellow line) support and as long as we hold above it, I will be expecting a full upward reversal with 97.10 as 1st target.
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