USD-index reversed nicely higher last week from 81.32 which appears to be a first impulsive structure that is part of a larger and new bullish cycle for the USD. As such, we expect much higher levels on USD-index in days and weeks ahead especially if we consider that decline from 83.50 was made a nice clear three waves which is a corrective price action, called a zig-zag. Ideally, market is now in wave 2) pull-back that will look for a support around 81.20. Critical/invalidation level is at 81.32 as wave 2) must never retrace more than 100% of wave 1). So as long that level holds we are looking higher.
What is Zig-Zag?
A zig-zag is a 3-wave structure labeled A-B-C, generally moving counter to the larger trend. It is one of the most common corrective Elliott patterns.
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