Dollar Index Elliott Wave: Monday reversal keeps wave four in play ahead of US CPI [Video]

Gregor Horvat Wavetraders

Good morning, everyone! The US dollar reversed Monday's move in a pretty classic way. Thin holiday markets, as we had yesterday with Columbus Day in the US, often bring moves that fade by Tuesday. I still see many FX pairs trapped in ranges, and I don't expect any major breakouts ahead of tomorrow's US CPI figures, which could give fresh direction to the dollar, yields and stocks.

Looking at the USD index from an Elliott Wave perspective, I still see a sideways wave four correction, which could unfold as an irregular flat or even a triangle. It can still dip towards the 101.75, 101.41 and 100.88 supports, but that's where I'll be looking for stabilization and a new wave five higher. Such a move could then send currencies like EURUSD and GBPUSD further to the downside. At the same time, Middle East tensions could keep oil and US yields supported on renewed inflation fears, which also favors the dollar in the bigger picture.

If you'd like to see more of my views on the dollar, FX and other markets, you're welcome to watch Monday's Elliott Wave webinar replay here:

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Author

Gregor Horvat

Wavetraders

Experience Grega is based in Slovenia and has been in the Forex market since 2003.

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