DXY: More Complexity Within This Corrective Structure
DXY - Daily
Last weekend, we identified the downside set up which the DXY followed through on this past week. However, the rally seen on Friday provided further complexity in this already complex sideways consolidation within our “Dollar Dormancy” period.
I cannot say that I have a full 5 waves down from the recent highs, which leaves the door open for several possibilities. First, if the DXY drops to a lower level early this coming week, then we can view it as a leading diagonal down for the c-wave of the (b) wave of the purple b-wave. Second, should the market continue to rally, then the b-wave of the (b) wave may be extending back up towards the 96.65 region. And, third, if we break out through the 96.65 region, then the (c) wave of the purple b-wave has begun earlier than I had expected, and we are likely heading up to the 99 region.
I hope this complexity makes it clear why I suggest people stay away from attempting to swing trade within a b-wave structure. They are quite variable and often unpredictable, and just when you have an ideal pattern in place, it often invalidates it for a more complex pattern.