You may like it or not, but the US Dollar remains one of the best indicators that every currency trader should follow. Despite the current global situation in 2024, we have seen some impressive moves across various markets. However, when it comes to the USD, we have experienced some fluctuations, but overall, we are still confined within a range from the latter half of 2023.

To understand the future of the US Dollar, we need to consider the broader picture.

Our research should always begin with a global perspective. So far in 2024, there hasn’t been much new information. The USD continues to face strong pressure due to the ongoing global situation. Conflicts in Ukraine and the Middle East remain major market drivers. Yet, we still lack new insights into the key question that traders are eagerly awaiting: When will these conflicts end? Until we receive new information about their resolution, significant unexpected moves in the USD seem unlikely.

A major factor influencing the USD this year is the upcoming US elections on November 5, 2024. This event should be a key focus in your weekly readings. Both candidates have distinct visions for the future of the US, and their economic plans are vastly different. Consequently, the outcome of the election will have a significant impact on the future of the US currency. Currently, Trump seems to have a better chance according to polls, so any change in this regard could have a potential short-term effect on the USD. I will cover this topic in more detail in November, providing a detailed forecast and trading strategy for the elections.

Next, we need to examine interest rates and consider what the Fed might do next. The Fed has been holding rates for too long, and from the researchers’ point of view, we can’t say that we have seen a good effect on the economy. We need to see a cut in the rates soon, because it will take time for that cut to have an impact on the markets.

Calendar for the Next 30 Days

I will also provide a calendar of upcoming economic news that could impact the USD.

Elliott Wave View on the US Dollar

On the 3-day chart of the US Dollar, we have observed more corrective movements this year. I interpret this as a potential triangle formation. According to Elliott Wave theory, a triangle consists of a 5-leg pattern labeled A-B-C-D-E. From my perspective, we can only see four legs so far, suggesting that the recent drop might be the D leg. This indicates potential support around the 102.30-101.50 range, which could lead us back to the 105-106 area.

For the alternate view, we should look at the correction from October 2023 as incomplete and look for support around 100.00. If we see a break below 99.60 (July 2023 lows), we can consider the triangle as already complete and look for more weaknesses in the USD while the price holds below 106.00.

Short-Term Strategy
Until the triangle pattern is complete—which could take a few weeks—holding any swing trades may not be advisable. For the next few weeks, I plan to focus on day trading in the direction of the current waves. I will look for short positions while we are in the D leg and consider long positions when we move into the E leg.

I hope you found this analysis helpful. Please remember that this is not investment advice but rather my personal view on the future movements of the US Dollar, which I wanted to share with you.

Regards,
Nicola Delic