The US dollar index has made new lows as expected and is at its final leg down according to my wave analysis. Bears should be very cautious as, I believe, we are close to completing the downward correction in an A-B-C pattern of 3 waves.
Green line = neckline resistance
Blue line = trend line support
Orange lines = bearish channel
The USD index has paused its decline at the blue trend line support. We are at the final 5th wave down from 95.94 and soon we should expect a strong upward reversal. Resistance by the bearish channel is at 95.50 and at 96 by the cloud.
The US dollar index should at least make an upward bounce to retest the cloud from below, although I believe that this downward correction will be the signal of a new upward move starting with new highs as a target. I remain neutral waiting for the confirmation of a trend change. I believe bears should lower their stops and start thinking of taking profits.
