Hi Captain,
I don't follow the DXY and I'm not sure if currency's are really driven by Elliott Wave which reflects investor behaviour but I had a look at the monthly and weekly charts of DXY. Monthly below.
EW: There is a 5 wave pattern up from the low in 2008, not strictly hitting normal EW price levels but the general pattern in EW is most important, so yes this move from 2008 to 2016 looks complete. If you treat the whole move 2008-2016 as a larger scale Wave 1, then expect a 61.8% retrace (blue levels) is pretty reliable to 82.346 over time. (took 8 years to go up, so some proportional time to go down).
The DXY however moves in long trends, so trend lines and price retracement levels might be more relevant. The weekly shows confirmed Up Trend lines 2008-2016 (in orange on Monthly) which has now broken. So DXY now in a down trend.
re Price targets you can see the peak of 2016 hit the 61.8% level of the ATH and turned, so ATH levels relevant. (see Black and purple levels)
Summary of thoughts:
DXY now in a downtrend,
Big support at cluster of 50%ATH and 61.8% Blue levels, so this is a very strong support level and also likely to work itself down to there over time (years),
The first move down from a Wave 5 top is imprecise and varies. Typically an initial move of 25% of prior range (already broken), working towards 38.2% (91.16) of the prior range is normal, then bounce into a Wave B (retrace back up 78.6%) before continuing to trend lower. There is also some natural support around 91.91.
Conclusion:
If DXY follows normal stock type behaviour, then I'd suggest
- a bounce off the 38.2% level shown in pink shading as first target (say 91.50)
- a longer term drift down to blue shaded area around 83.
Note that the weekly looks like a bit of capitulation already, so maybe there is some support higher than my 38.2% level, at least as an interim target, before trend down continues.
Alternative view: If an long term uptrend was to resume, still look for consolidation around that 91.50 pink zone and to work sideways for quite a period to re establish a base. But for now the chart is in a downtrend until it proves that it isn't.
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