What are the perspectives for the USD? This is one of the most important and current questions that financial markets are wondering. After more than three months of sideway phase, we have recently recorded a first directional buy signal to strengthen the dollar against all the major currencies.

Using the Inch platform (https://datascollector.inchcapital.com/index.php), we find out how the last buy signal was recorded on April 20. The position is still on bullish with a stop at 91.06 and the first target at 93.86 read more.

 

US Dollar Index – daily closing 92.512 – May 2th, 2018

The picture shows the Dollar Index daily bar chart with the las buy signal started on April 20th, 2018

InchCapital Platform – Dollar Index updated for May 2th, 2018 – Data Source Datalink

 

Our aim, however, is not to tell what happened but what will happen and therefore we prefer to focus our attention on the models based on Elliott Wave Theory, in order to be able to respond to medium / long-term expectations.

 

Us Dollar Index – Monthly chart and Elliott Wave Scenario for the medium / long term.

The picture shows the Dollar Index candlestick monthly chart to purpose to highlight the long-term trend and the outlook based on Elliott Wave Theory. A bullish perspective for the next year is expected.

InchCapital Platform – Dollar Index Monthly chart – Data Source Datalink

 

The monthly chart, in semi logarithmic scale, shows the trend of the Dollar Index analyzed according to Elliott Wave Theory. The proposed count is not the only one available. Other scenarios that I personally consider secondary can be elaborated, aware of the fact that the use of adverb personally is in itself one of the limits of the theory in question.

In summary, this is today one of the most interesting markets ever. The game at stake is really important and destined to characterize the next two years in a directional way. In other words, it is clear that we are at a turning point. The count that I propose is bullish and belies the double maximum bearish pattern formed with waves not compliant with a bearish scenario.

Instead, this count proposes strengthening the dollar for the next eighteen / twenty-four months. On the other hand, rate of the Dollar Index less than 88.2530 will involve the re-elaboration of the scenario. In this case, for a period of twelve / eighteen months we will expect the progressive weakening of the dollar as recorded in the two previous bearish phases of 9/2003 – 12/2004 and 2/2007 – 3/2008.