We have seen some volatility and spikes during the holiday period on the FX board, but if we look at the daily chart of the U.S. Dollar Index (NYBOT:DXH14) we can see that the price has not gone far lately. We see a sharp rally up from the 79.00 October low followed by a deep pullback, which we think represents a corrective price action. As such, our bias is bullish for a move back to 81.57. If that is the case, then we expect to see pressure against the EUR (FOREX:EURUSD), GBP (FOREX:GBPUSD) and other risk-on currencies.
U.S. Dollar Index daily Elliott Wave Analysis
Below we have the intraday chart of GBP/USD, which is still bullish, but we see the shape of an ending diagonal now with sub-wave v) testing 1.6600/1.6650 resistance zone. An impulsive reversal down to 1.6457 key level would put bearish price in action. We are still waiting on confirmation signs before we pull any trigger for shorts!
GBP/USD four-hour Elliott Wave Analysis