In a previous post, I highlighted the Fibonacci retracement confluence clusters for the S&P 500 Index and now I wanted to show the same methodology of possible confluence support on the recent downswing in the US Dollar Index.
US Dollar Index with Fibonacci Clusters:
Using Constance Brown’s method of drawing Fibonacci grids off significant points (of support, not necessarily spike highs or lows), we have the following Fibonacci grid.
I was only able to draw two major Fib grids, as price really has made a steady upwards advance with nary a pullback. As such, I took the grid off the April-July price lows (from price consolidation) and off the September lows, taken to the resistance price just above $88.00.
We see only one zone of Fibonacci confluence, which picks up about the $82.00 index level ($82.17 and $81.80 to be exact). It is likely that price will find at least temporary if not major support at that level, but should it fail there, we would have major support coming in at the $80.00 Index leel, which would represent three support confluences:
The 50% large scale retracement at $79.80
The 61.8% minor retracement at $80.73
The prior swing high in September at $80.38
Although I haven’t labeled it as such, the possible Elliott Wave count has us carving out a Wave 4 retracement, with the March to July area being a complex correction; the July lows to September highs being Wave 1; the September price correction being Wave 2; while the large momentum rise from $76.00 to $88.00 being the impressive 3rd Wave.
This count will be confirmed if price remains above the $80.00 swing high from Wave 1… and will be invalidated should price cleanly break that level.
For now, continue to watch the $82.00 price level in the US Dollar Index very closely.
Corey Rosenbloom
Afraid to Trade.com
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