FX.co ★ #USDX Analysis for October 15, 2013

Although the dollar index has overlapped the wave 1 high and canceled the wave 4 count, we now turn to another bullish alternative that implies that another wave 1 and 2 are finished, but they are of lower degree. The bullish potential of this wave count is even bigger than the previous wave count.

The blue upward sloping trendline was held and support did not break. This is a good sign for our bullish wave count and we believe that the trend is reversing upwards not only for the short term, but also for the longer term as long as prices do not fall below wave 2 (79.85).

The daily chart continues to show the short-term trend change, but it is too early to say anything about a trend change in the longer term. We remain slightly bullish favored as this could be a trend reversal for a larger scale move of the Dollar index towards 85.