4 Hour chart trend: Short. Main price points: 1.4151, and 1.4326. Looking for: Wave 3) targets.
Euro is trading powerfully lower from our Fibonacci resistance zone that was discussed in the past week. Traders that are in short positions should patiently be watching for the 1.4151 support area, where a red wave I) (sub-wave of a blue wave 3)), may hit a temporary bottom. However, prices need to stay below 1.4326 wave 2) high, while wave 3) develops, other-wise the wave count will be invalidated. If the market is really trading in a blue wave 3) then five waves of decline is expected, with a first target around the 1.3960 area, followed by a second shown at the 161.8% Fibonacci extension of a wave 1).
OIL; Down to $58!?
Weekly chart trend: Long. Main price points: $33, and 73. Looking for: Wave 2).
Oil bounced from the trend-line resistance area, where $73 per barrel appears to be the top of wave 1) followed by the current, corrective wave 2). We are looking for the sub-waves of a new up-trend, as red wave B is completed at $33 per barrel. This support area needs to holds in the coming months and years, while wave C develops. Stochastic indicators are also in a pull-back mode, which may suggest a turning point in the coming weeks.
The 38.2% Fibonacci level may already be the bottom of wave 2).
Daily chart trend: Mixed. Main price points: 58.30, and 73.27. Looking for: Break through 73.27
Oil prices on a daily chart are still below the wave 1) top; $73.27 per barrel, which means that there are two possible scenarios. The first one is that wave 2) is already completed around 38.2% of wave 1), at $58.33 per barrel, which means that a break through wave 1) highs is expected. If the break of 73.27 does not soon happen, then it may also be the case of a more complex wave 2), which means that a turning point into another leg down, below 58.30 is also one of the valid scenarios. Traders should pay attention to a bullish move if the 73.27 area fails or on a more complex wave 2) if the 58.30 support gets broken.
4 Hour chart trend: Short. Main price points: 58.30, 62.64 and 73.27. Looking for: Bearish wave count
Compared to a daily wave count, the price structure on the four hour oil chart singal for a more complex wave 2) as on the first place. The market has came out with a very clear bearish signal, as the break through the trend-line support with a wave III) in progress has appeared. As we know, wave III) is the most powerful wave in a five wave pattern, so any near-term strong bearish move should not be a surprise then. If we are on the right track here then a huge blue wave C leg is developing now, with a new target somewhere below wave A support zone (58.30).
Dollar Index
Weekly chart trend: Long possibilities. Main price points: 77.43. Looking for: Move higher
On the weekly dollar index chart, the flat correction, shown in wave B position may already be completed as our red wave v hit the new lows in the past week. The blue wave B found the lows exactly at 61.8% retracement of wave A, which is a typical area for a turning point. Traders should be watching for at least three waves of a pull-back in the coming days and weeks, which should lead the prices up into around 82-83 zone.
Daily chart trend: Long. Main price points: 77.43. Looking for: Move higher
The dollar index has made a sharp turning point recently, which indicates a possible temporary dollar recovery over the next few days and weeks. We can clearly count five waves down from 89, black wave B) top to current 77.43, wave C) lows. Three waves are always expected once that prices have already broken through the upper line of a trading channel.
4 Hour chart trend: Long. Main price points: 77.43, and 79.39 Looking for: Wave II)
On the dollar index four hour chart, the market fell from the 79.39 top to the current levels. The market is currently trading around the 50% area of wave I), where a bounce higher may happen over the next session or two. If the wave count is correct, the 77.43 low must hold for an expected up-trend through the 79.39 area, which will confirm a blue wave III). The first target after 79.39 break will be around the 80 area (wave I) distance, measured from wave II)).
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