17.07.201311:43 Forex Analysis & Reviews: Dollar index still in downward corrective pattern 17/7/2013

Dollar index has made a new low at 82.39 yesterday as expected by our analysis. We mentioned that the upward move from 82.42 was overlapping and not impulsive, therefore we labeled it as corrective. We were expecting this downward move to complete near the 61.8% Fibonacci retracement but it just made a narrow new low. This downward correction might not be over yet. It may still have room to fall towards 82.20.

The decline from 84.75 is now a 3 wave move down that is in line with our Elliott wave analysis and labeling of this down move as corrective. Confirmation that this downward move has ended will come when prices break above the intermediate high at 83.45. Until then one can try and guess a bottom near the 61.8% retracement.

For short-term traders, breaking above the short term resistance at 83, will push prices to test 83.45 intermediate high. Stop for bulls should be the recent low at 82.39 as prices could head towards our initial target 82.20 the 61.8% retracement. I'm cautiously bullish as there still is high probability to see a new lower low.

Concluding we are neutral with potential entry level 82.20-10 or if a break above 83.45 occurs. Bears will need to have 83.45 as stop.