Hello, traders and welcome to our new 4h update about the USD index.
On USD Index chart we can see a slow, and sideways price action, which in general resembles an Elliott wave triangle correction. A triangle correction is a more complex pattern, made by five legs and each of them has three minor waves. At the moment we are observing wave d of a bigger triangle within wave 4, which can see support at the lower EW triangle line, also near the Fibonacci support region of 61.8. From there a new three-wave rally may follow into final leg e, which can later see resistance and a turn lower at the 90.60 level.
USD Index, 4h
A Triangle is a common 5-wave pattern labelled A-B-C-D-E that moves counter-trend and is corrective in nature. Triangles move within two channel lines drawn from waves A to C, and from waves, B to D. A Triangle is either contracting or expanding depending on whether the channel lines are converging or expanding. Triangles are overlapping five wave affairs that subdivide 3-3-3-3-3.
Triangles can occur in wave 4, wave B, wave X position or in some very rare cases also in wave Y of a combination.
Elliott wave triangle pattern: