FX.co ★ #USDX Analysis for August 5, 2013

The Dollar Index has made an upward impulsive move from 81.40 to 82.50. The short-term trend has changed to up. Prices pulled back in a corrective three wave pattern and pushed prices towards the 61.8% Fibonacci retracement level. This price level is according to our Elliott wave analysis the best entry level for long positions and the low at 81.40 as stop.

The short-term upward move towards 82.50 has broken the short-term resistance levels and the sequence of lower highs and lower lows has ended. This is a signal of trend reversal. We believe that despite the selling pressures that pushed prices below 82 again, the bullish trend will resume upwards soon. Short-term resistance is found at 82.10 and if prices break above it, this will be a good sign for the bulls. Support is found at 81.65 next where the 76.4% Fibonacci retracement is.

Our long-term view remains unchanged and we still are bullish as long as prices trade above the recent low at 81.40. We expect prices to resume the upward trend and we plan on adding to long positions when prices break above 82.10-82.50-83.45. We target a new higher high than 84.75.