(Elliott Wave Forecast Team)
Short Term Elliott Wave view in Dollar Index (DXY) suggests rally to 109.29 on 7.14.2022 peak ended wave (3). Pullback in wave (4) ended at 105.05 with internal subdivision as a zigzag Elliott Wave structure. Down from wave (3), wave A ended at 106.38. Wave B rally ended at 107.42. The Index then resumes lower in wave C which ended at 105.05. The 45 minutes chart below shows the internal subdivision of wave C in 5 waves. Down from wave B, wave ((i)) ended at 106.06, and rally in wave ((ii)) ended at 106.975.
Index resumes lower in wave ((iii)) towards 105.54, and rally in wave ((iv)) ended at 106.66. Final leg lower wave ((v)) ended at 105.05 which completed wave C of (4). The Index has turned higher in wave (5), but it still needs to break above the previous wave (3) peak at 109.29 to rule out a double correction. Up from wave (4), wave ((i)) ended at 105.7 and dips in wave ((ii)) ended at 105.45. Index then resumes higher in wave ((iii)) towards 106.55. Expect the Index to extend higher 1 more time to complete wave ((v)) of 1, then it should pullback in wave 2 to correct cycle from 8/2/2022 low before the next leg higher. As far as pivot at 105.05 low stays intact, expect dips to find support in 3, 7, or 11 swing for further upside.
$DXY 45 Minutes Elliott Wave Chart
Dollar Index (DXY) Elliott Wave Video
EUR/USD: Daily recommendations on major
EUR/USD – 1.0157
Despite euro’s brief rise above previous 1.0278 resistance to a near 4-week high of 1.0293 (Asia) Tuesday, intra-day selloff on safe-haven usd’s bid due to US/China tension, then weakness to 1.0164 on hawkish Fed speak suggests rise from 0.9953 (July) has made a top but below 1.0082/97 support is needed for weakness towards 1.0050.
On the upside, only a daily close above 1.0216 would risk stronger gain towards 1.0254 but 1.0293 should remain intact.
Data to be released on Wednesday:
Australia AIG construction index, S&P Global services PMI, retail sales, New Zealand employment change, unemployment rate, labor costs index, Japan Jibun bank services PMI, China Caixin services PMI.
Germany exports, imports, trade balance, current account, S&P Global services PMI, Swiss CPI, France budget balance, S&P Global services PMI, Italy S&P Global services PMI, retail sales, EU S&P Global services PMI, producer prices, retail sales, UK S&P Global services PMI.
U.S. MBA mortgage application, S&P Global services PMI, durable goods, durable ex-defense, durable ex-transport, factory orders and ISM non-manufacturing PMI.