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Sanmi Adeagbo

2 May 2018

Forex

2 May Dollar Index Elliott wave analysis ahead of FOMC statement

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Ahead of the FOMC statement and the Federal fund rate coming up, the following 2 May Dollar Index Elliott wave analysis looks at the Dollar Index based on Elliott wave theory.

02 April, AtoZMarkets  - In less than 3 hours, the FOMC interest rate statement will be released. It's an event FOMC uses to communicate with investors about monetary policy. The statement also comes with the outcome of their votes concerning the interest rate and the economic conditions that influenced their votes. Usually, this event causes spikes and huge moves in USD quoted currency pairs like EURUSD, USDJPY, GBPUSD etc. The common factor here is USD.

In the last two weeks USD has gained about 2.8%. This move can be seen across board as EURUSD, GBPUSD and Gold dropped massively while USDJPY gained. The chart below shows the long term Elliott wave dollar forecast.

2 May Dollar Index Elliott wave analysis: long term forecast


2 May Dollar Index Elliott wave analysis Dollar Index Elliott wave analysis, Weekly (click to zoom)

An impulse wave developed from 9300 (April 2011) to 12600 (January 2017). Price dropped massively at the end of this wave pattern. A 3-wave correction was supposed to follow according to Elliott wave theory. The drop to 11500 meant the end of wave (A). The current rally is part of wave (B) - correction of wave (A), which could hit 12180-12310 resistance zone before the next dip {wave (C)} follows.

2 May Dollar Index Elliott wave analysis: what next?


2 May Dollar Index Elliott wave analysis Dollar Index Elliott wave analysis, H4 (click to zoom)

At the end of wave (A), rallied for wave (b). The strong rally was preceded by a triangle pattern. USD could be about to make a dip before the rally resumes. The current rally could lead to a much bigger and complex correction (double zigzag). The price reversal zone still remains at 12180-12310. USD strength is expected to continue unless a negative FOMC drives price back to the triangle. After the FOMC, we will look at the intraday moves much closer to spot short term directions. Stay tuned for the next update.

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USD Dollar Index. Dollar Elliott wave analysis

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