US Dollar Index – Do Fibonacci Price Measurements Really Work?
by WaveTrack International| March 4, 2016 | 4 Comments
Sometimes, markets unfold in an intricate way that appears incomprehensible to fundamental or orthodox technical analysts. It is in these times when Elliott Wave practitioners can gain an insight into the value of fib-price-ratio analysis.
In mid-January, we proposed a very delicate pattern structure for the US$ index – an ending contracting-diagonal that began from the Aug.’15 low and was forecast to continue during the next months. Of special importance was the December decline from 100.51 to 97.19 that was seen as wave [a] of the larger 2nd wave. Basis fib-price-ratio measurements, we projected an ultimate low for the 2nd wave towards 95.20 – this was derived from a fib. 61.8% extension of the initial decline to 97.19, a standard measurement for zig zag sequences.
The actual outcome, as can be seen a month later, is quite amazing! The US$ index declined to a recorded low of 95.23 and was immediately rejected!
This testifies to the value of fib-price-ratio measurements that, correctly applied, can sharpen the awareness in terms of pattern/price-convergences. Only too often we see that patterns terminate at important fib-price-ratio support/resistance-levels. This can be an invaluable clue for someone trying to figure out the structure of a pattern.
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