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DXY weekly: 5th wave looks complete, risk of a ST setback - Westpac

FXStreet (Bali) - David Coloretti, CMT, Technical Strategist for Westpac, notes that the USD index weekly chart shows MT momentum and price failing with a 5th wave rally looking complete, which implies risks to the downside towards 84.50/00.

Key Quotes

"The USD Index has produced a 12% rally since trading at the 2014 lows in May. MT momentum and price structure have been highly supportive of the rally, until now, as the complete 5 wave rally runs into a stark momentum failure and potentially completes a bearish weekly candle (if the weekly close is below 87.58) this week."

"Note that the LT bullish breakout, completed in September, targets a far more substantial USD rally, well into 2015. The current failure merely warns of a correction that has potential to cause a retracement towards the LT triangle top (broken in September) around 84.50/00. Weekly close this week is crucial."

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