The weighted index of the other currencies against the dollar give a fair reflection of the overall market sentiment towards the greenback. Most professional traders look towards the Treasury yield and dollar index activity to gauge their dollar trade potential. The index is made up of euro, yen, pound, Cad, Swedish kroner, aussie, and the swissy. The index was developed in March 1973, after the gold standard was scrapped, and its value is a reflection of the value of the Usd now, compared to what it was worth then. A read of 75.00 on the index equates to the Usd value being 75% of what it was three decades ago.Weekly chart trend: Short. Main price points: 77.43. Looking for: Wave B
On the weekly dollar index chart, the flat correction is still not completed and confirmed, as the market did not break through the upper resistance line and wave IV highs yet. Actually, traders should be looking for another push down, near to the 75 support zone once the 77.43 low and 61.8% Fibonacci support is out. This could be the final push of a red wave V leg, before the wave B pattern will be completed.
Daily chart trend: Short. Main price points: 77.43, and 79.51. Looking for: Wave V
On a daily dollar index chart we are looking for an ending diagonal in wave V position with a blue wave III) in progress. If this is the case, the prices must not trade above the blue wave II) high 79.51 otherwise the diagonal count will be invalidated. As long the structure remains intact, we will be looking for a move lower near to the 75 support zone, where a huge long turning point may appear.
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