#USDX Analysis for September 19, 2013 Trend News

The Dollar Index has broken support and made new lows. Prices never managed to produce a bullish signal and our neutral stance protected us. On the contrary, not only prices reversed upwards but instead were pressured lower after heavy selling following Bernanke's speech. The Dollar Index has now broken important support levels and it has moved outside of the upward longer-term channel.

This is a negative signal for the longer-term trend of the Dollar as it opens the way to much lower support levels after breaking out and below the channel. Dollar weakness could lead the index towards 77.50 in the longer term or even 76. The trend is downward and will only change if prices manage to take back the 81 level and then break above 82.70.

In the short term, prices are expected to make an upward bounce as a counter move to the downward spike. We could expect prices to reach 80.70-80, but with current conditions I do not see a potential trend reversal at this time. Concluding we remain neutral as the volatility in this market does not provide any trading opportunity with a good risk/reward ratio.

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Gold Elliott wave analysis for September 19, 2013 Trend News

Gold during Bernanke's speech was spiking. Our stop was hit and our short position was protected against the rising volatility. Prices reached 1,370 breaking out of the downward sloping channel and reaching the 61,8% Fibonacci retracement. The upward thrust looks like an impulsive wave and we now expect a pull back towards 1,330-40.

The decline from 1,433 is not a clear impulsive (complete 5 wave move) and that is why our first choice is to label it as a corrective wave. Taking into consideration that the move from 1,180 to 1,433 is also a three wave upward move, we can now say that we are in a larger degree corrective pattern, where wave A (1,180-1,433) and wave B (1,433-1,291) are over. We have most probably started an upward wave C now. This wave count will hold as long as prices stay above 1,291. Currently, prices made 5 waves up from 1,291 and we expect a pull back towards 1,330-40.

In the daily chart we observe that prices are back testing the broken trendline. The trend is now changing to upward one and is expected to move towards 1,500 as long as prices stay above 1,291. Confirmation will come if prices break above 1,433. Concluding, we remain neutral to bullish, waiting for a pull back to enter long wit 1,291 as stop.

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