DXY Possible Scenario for continuing its correction

2021年2月6日

The DXY, which is known to be the denominator or the main driver of the financial markets started its correction cycle at the beginning of January, and we expect for the month of February to see the DXY reaching the [92.5-93.00] area before tickling its way back for more downside reaching the [80-81] in 3-4 months from now. Looking at the chart above, we can see the DXY finishing (1) which includes 5 waves up, and also finished (2) with an ABC correction, so for now we are waiting for wave 5 of wave (3) to form and possibly reach the 68.1% Fibonacci level (91.883), and if managed to break it, it could continue its way to 92.420. What is also interesting is that we've seen wave 4 retesting the previous wave iv of wave 3, and we know that according to the Elliott principle, after a retest to the previous wave 4, we expect a move to the upside. Thus, we should always be ready to capitalize on the drop of all the major currencies for this month, and then re-enter with buy positions after finishing its correction.

2021年2月6日

註釋

The DXY, which is known to be the denominator or the main driver of the financial markets started its correction cycle at the beginning of January, and we expect for the month of February to see the DXY reaching the [92.45-93] area before tickling its way back for more downside reaching the [80-81] area in 3-4 months from now.

Looking at the chart above, we can see the DXY already finished (1) which includes 5 waves up, and also finished (2) with an ABC correction, so for now we are waiting for wave 5 of wave (3) to form and possibly reach the 68.1% Fibonacci level (91.80), and if managed to break it, it could continue its way to 92.420. What is also interesting is that we've seen wave 4 retesting the previous wave iv of wave 3, and we know that according to the Elliott principle, after a retest to the previous wave 4, we expect a move to the upside.

Closing the week above 91.00 might be seen as a confirmation that this week’s rally hasn’t just been a dead cat bounce or flush out of weak shorts, and a move back towards last week’s highs (91.50) and breaking it would seem very likely.

Thus, we should always be ready to capitalize on the drop of all major currencies for this month, and then re-enter with buy positions after finishing its correction (DXY).