U.S. Dollar Heads Lower

NEW YORK (TheStreet) -- In last week's article on "Aussie Signal Off S&P Support," we mentioned a possible move lower on U.S. dollar against the majors, if S&P futures could find support around the 1080-1083 zone.

The bottom was hit at the 1082 area, as our chart above shows, from where the market has already traded higher, for almost 30 S&P points since Thursday.

The chart is showing a bullish price structure with the black wave V in progress, after the previous wave III top was taken out. That followed the 1082 wave IV lows that were established on Thursday.

From an Elliott Wave perspective; once we can count a clear five waves in one direction, at least a three-wave corrective pull-back is what should follow.

As such, new short dollar positions are currently not recommended, considering the current S&P levels, as we can expect some changes on the major pairs once the S&P corrective pull-back follows through.

In the "Aussie Signal Off S&P Support" we also mentioned a bounce higher on the Aud/Usd pair into the blue wave v.

From an Elliott Wave perspective, wave five is an impulse wave, which means that it is structured by five smaller waves. Once we count five waves in the wave-five position, it should be a signal that the trend can change direction quite quickly.