The Dollar index continues to move in an impulsive pattern higher breaking above March low at 96.15. This means that the upward bounce from 93.10 is not a wave 4. Most probably, we have seen the end of a three wave downward correction at 93.10 near the 38% retracement. What we expect now is a new upward move to push the price towards new highs.
Breaking above the cloud resistance and out of the downward sloping wedge were the initial signals of a trend reversal. The Dollar index has completed wave 5 upward move from 93.10 to 95.85. It was pulled back to 38% retracement and started a new upward wave to higher highs for the short-term. The fact that the pullback was so shallow is another sign of strength for the dollar.
The Dollar index has overlapped the March low canceling any wave count that was implying. The decline from theFebruary highs is in 3 waves and completed. The bounce is impulsive and bulls are likely to test the Ichimoku cloud at 96.90-97. A breakout above this area will increase chances that the Dollar index will rally to new highs.
The material has been provided by InstaForex Company – www.instaforex.com