Dollar Index (DXY) forecasting the rally after three waves pull back

Elliott Wave Forecast Team ElliottWave-Forecast.com

In this technical article we’re going to take a quick look at the Elliott Wave charts of Dollar Index DXY , published in members area of the website. As our members know, Dollar is still trading within the cycle from the September’s low. Recently, we saw a 3-wave pullback, followed by a solid rally as expected. In the further text, we are going to explain the wave count.

DXY H1 New York 01.06.2025

The current view suggests that the Dollar Index completed a 3-wave pullback from the peak, ending at the 107.751 low and labeled as wave ((ii)) blue. A sharp rally followed from this low, appearing impulsive. We have labeled this short-term cycle as wave i red, indicating the start of a new bullish cycle. A 3-wave pullback in wave ii red is anticipated before the rally resumes. We expect the Dollar Index to continue finding intraday sellers in 3, 7, and 11 swings.

DXY H1 New York update 01.07.2025

We saw a 3-wave pullback in ii red, followed by a move up. The key level is 107.751. While the price stays above it, we expect more rally in the Dollar Index, ideally towards new highs. A break above the previous peak ((i)) black will confirm that wave ((iii)) is in progress.

DXY H1 New York update 01.08.2025

The 107.751 low held as expected, and the price moved higher. We got a decent rally in Dollar index. The price is now approaching the previous peak, and we are looking for a break above wave ((i)) black to confirm further strength.

Author

Elliott Wave Forecast Team

ElliottWave-Forecast.com

EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates

Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold: Volatility persists in commodity space

After losing more than 8% to end the previous week, Gold remained under heavy selling pressure on Monday and dropped toward $4,400. Although XAU/USD staged a decisive rebound afterward, it failed to stabilize above $5,000. The US economic calendar will feature Nonfarm Payrolls and Consumer Price Index data for January, which could influence the market pricing of the Federal Reserve’s policy outlook and impact Gold’s performance.

Week ahead: US NFP and CPI data to shake Fed cut bets, Japan election looms

US NFP and CPI data awaited after Warsh’s nomination as Fed chief. Yen traders lock gaze on Sunday’s snap election. UK and Eurozone Q4 GDP data also on the agenda. China CPI and PPI could reveal more weakness in domestic demand.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.