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Currencies , Investing

U.S. Dollar: Has the Mainstream Been Way Too Confident?

Meanwhile, greenback’s Elliott waves are showing the way

by Bob Stokes
Updated: November 17, 2022

Investors who use Elliott wave analysis know that the main price trend of a financial market subdivides into five waves.

Also know that wave 1 and wave 5 are often approximately equal in length.

That knowledge helped our Global Market Perspective make a successful call on the U.S. Dollar index.

The November issue showed a monthly chart which dates back more than 14 years and said:


The U.S. Dollar Index continues to look like it's topping. The index is testing the level where wave (5) would equal wave (1), a common relationship.

Keep in mind that subscribers get to see all the wave labeling.

With the benefit of hindsight, we now know that the top registered on Sept. 28 -- still, that doesn't discount the fact that the topping process was recognized by using Elliott wave analysis.

Since that analysis on Nov. 4, the U.S. Dollar Index has declined in price.

Another giveaway that the greenback was headed for a tumble is that the mainstream seemed to be growing a bit too confident about the prospect for a further rise in the index. These two magazine covers provide examples of that:


The late analyst Paul Macrae Montgomery showed over the years that specialist industry magazines sometimes highlight financial trends on their covers just as those trends are ending.

Of course, Elliott wave analysis nor any indicator -- such as the magazine cover indicator -- can offer a guarantee about future market action, but the Elliott wave model and many time-tested indicators have proven to be quite useful throughout different market cycles.

Plus, you've seen a sample of how Elliott Wave International approaches analysis of 50-plus financial markets around the globe, including stock markets, cryptocurrencies, bonds, metals, forex and crude oil.

Tap into more global financial insights as you follow the link below.

Focus on the Price Patterns of Global Financial Markets

It happens all the time: One market "pro" on financial television explains why he is bullish on a financial market, then a half hour later, an equally experienced "pro" offers reasons why she is bearish.

Forget the opinions... and instead, look to the price patterns of markets themselves -- THAT'S where the "rubber hits the road" -- THAT'S where you'll find current actionable information.

Discover what our global analysts are telling subscribers about the next big moves in 50-plus global financial markets, including stocks, cryptocurrencies, bonds, metals, crude oil, natural gas and forex.

Click on the link below to learn more about our Global Market Perspective.

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