DXY Elliott Wave: Wave (B) Tags 0.618 Under 101.800

The rally into 100.563 is exactly what we were waiting for. Price tagged the 0.618 retracement right back under the broken trendline. Precise stuff.

That kind of reaction doesn't happen by accident. When a market rallies straight into a Fibonacci level and stalls under a broken trendline at the same time, it's telling you the structure behind it is real, not random noise on a daily chart.

What does the wave (B) count on DXY actually mean

Wave (A) already completed the initial leg down from the highs. That drop took the index from the (B) top near 102 area down into the 98 zone, unfolding as a five wave decline labeled 1 through 5 on the chart.

Wave (B) has now retraced back into resistance, right where the structure said it should. Inside that (B) wave sits a smaller zigzag: (a) down, (b) sideways, and now (c) up into 100.563. That (c) leg is the rally that just tagged the 0.618 retracement of the entire wave (A) decline.

This is textbook Elliott Wave behavior for a B wave correction. It retraces a chunk of the prior move, it reaches a Fibonacci level with precision, and it does so right under the broken trendline that used to be support. The confluence of the 0.618 level and the old trendline is why this zone matters.

Why 101.800 is the line in the sand

Our bigger view hasn't changed. Invalidation sits at 101.800. As long as price stays under that, the setup for wave (C) down remains valid.

That number isn't arbitrary. It sits above the (c) wave high and above the 0.618 retracement itself. If DXY pushes through 101.800, the wave (B) correction is no longer a simple zigzag capped at Fibonacci resistance. It becomes something bigger, and the entire bearish case for wave (C) falls apart.

This is what an invalidation level is for. It's not a guess, it's the price that proves the count wrong if it trades there. Until then, the roadmap points down toward the blue arrow target drawn on the chart, well below the current 98 to 100 range.

What has to happen before wave (C) down gets confirmed

Now comes the part we watch closely: confirmation that the top is in and the next leg down is starting. We don't chase the move before it shows its hand.

Tagging a Fibonacci level is not the same as reversing. Plenty of B wave corrections poke at resistance, stall for a few sessions, and then grind higher before finally turning. The job right now is watching for the first signs of a five wave decline starting from this zone, the kind of impulsive structure that would mark the start of wave (C).

Structure did its job. Now we wait for it to confirm the next one.

Closing thoughts

DXY has done exactly what the wave count expected: a clean (a)-(b)-(c) rally into the 0.618 retracement, stopped cold under the broken trendline and under 101.800. The setup for wave (C) down stays intact as long as that level holds, but the next leg needs its own confirmation before anyone treats this as more than a level being respected.