USD Index hits resistance as five-wave cycle, RSI divergence and wedge pattern within 5th may cause a reversal.
USD Index is coming impulsively higher in the 4-hour chart after a three-wave A-B-C correction in wave IV back in August, so the current recovery is a new five-wave rise. But it’s a fifth wave that can be now in late stages here at 110 – 111 area. Divergence and potential wedge formation also suggest that the upside can be limited. Drop below 108.00 will suggest that the top is in place, at least a temporary one. Also, the current DXY has a lot to do with EURUSD of course, which for now stayed about the recent low as European Central Bank President Christine Lagarde noted that they are ready for further hikes on upcoming meetings, taking the deposit rate into neutral territory.
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