Good morning, traders!
Global stocks are recovering after Trump said the U.S. was close to reaching an agreement with Iran, boosting hopes for a diplomatic resolution. As warned yesterday, crude oil remains bearish and is extending its decline, while Treasuries are bouncing. Risk-on assets are recovering, and the U.S. dollar is losing momentum again.
This dynamic could continue throughout today’s session, but we’ll see what kind of daily and weekly closes we get later. The 10Y U.S. Notes chart is now recovering within a projected wave “c” that may form part of a lower-degree five-wave bullish cycle. In that context, we could see at least a three-wave decline in the U.S. Dollar Index (DXY). DXY has already declined sharply intraday after completing subwave (v) of an impulse, so we are now tracking a minimum three-wave drop. After the current subwave b/ii pullback, we should be alert for further weakness toward wave c or wave iii.
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