FX.co ★ #USDX wave analysis for May 11, 2015

The Dollar index has reversed the short-term trend to bullish as expected, because a decline of wave C down was nearly a complete 5 wave sequence since 99.95. There are high probabilities that the entire downward correction is over and that we have just started a new upward move that will bring the index above 100.

Blue line = trend line support

Green line = neckline resistance

Orange lines= bearish channel

The Dollar index has held above the blue trend-line support and bounced. The price has broken above the Orange downward sloping channel but it is testing the Ichimoku cloud resistance now. The trend is bullish for the short-term as long as the price is above 94.20. We could see a back test of the channel breakout level or a continuation of this upward breakout that will bring the price inside the cloud resistance.

The weekly chart shows my wave count as I have been saying since last week and I believe last week's low is the end of wave 5 of C down. The price also held above the kijun-sen indicator and I believe I can say with many chances of success that the trend has reversed and we should expect new highs over the coming weeks. Bulls should also protect their positions with a stop at the kijun-sen level in case there is another round of the dollar weakness.