FX.co ★ #USDX Analysis for October 11, 2013

The Dollar index is most probably rising in an impulsive pattern. We believe that the current wave formation is as shown in the chart below. The index is currently in wave 4 and we expect a new upward move to new short-term highs as wave 5.

The wave count as shown above will be canceled if prices break below the wave 1 high at 80.18. If prices overlap that price level, then this is not wave 4. The bullish trend will be challenged if prices reach the blue upward sloping trendline currently providing support at 80.05.

In the daily chart we observe the small trend change and prices will have to continue higher towards 80.75-81 in order to mount a serious challenge for the longer-term downtrend. Currently, we are bullish in the short term, as long as prices trade above 80. Target is at 80.75-81.