On March 6th we published “USD Index Has An Unpleasant Surprise?”, warning you that there was a triangle on the 4-hour chart. Triangles are like a “proceed with caution” sign, because they precede the last wave of the larger trend. Even though it is very difficult to predict the exact length of this last wave, the triangle tells you not to be too confident, because a reversal is likely to occur soon. Here is how the USD Index looked like less than 2 weeks ago.
Later on, prices continued higher and almost reached the 101 mark. However, the pattern stayed the same so the bulls were still in danger. A danger, which materialized itself after Janet Yellen’s speech on Wednesday. This is how panicked bulls appear on a chart.
As visible, once wave (5) completed its impulsive structure, the stage was set for the anticipated decline. On March 18th, the USD Index dropped by more than 600 pips in less than three hours. And while the majority would blame it on the FED’s decision, Elliotticians do not need to look for a culprit, because the Elliott Wave Principle warned us early enough.
