Forex

CRB Index Reversal: Impact on Commodities, Inflation, and the DollarSep 3, 2024

It’s been some time since we last looked at the Thomson Reuters CRB Index, a key indicator for tracking commodity performance and gauging inflation. With inflation softening recently, it’s not surprising that the CRB Index is also reversing. The chart shows a three-wave rally from the 2023 lows, which suggests a corrective movement in an ABC formation, as identified in Elliott Wave theory.

When a correction like this concludes, the next move typically retraces the previous rally. Looking at the CRB Index, we expect prices to move even lower, possibly down to 241. This decline could be further driven by falling crude oil prices, especially if OPEC increases supply as recently announced.

Some may wonder how this will impact the USD. Currently, the correlation is that lower commodities lead to lower CPI, which in turn suggests a lower USD due to expectations of Fed rate cuts. Until the Fed cuts rates a few times, the correlation between a lower CRB and a lower USD could remain in play due to falling US yields. However, once rate cuts are nearing their end, that’s when the dollar may find a bottom. But the most important part? Even if rate cuts will continue through 2025 due to weak economic data, the USD may still stabilize on recession risk.

CRB Index Reversal: Impact on Commodities, Inflation, and the Dollar CRB vs. DXY Daily Chart
CRB vs. DXY Daily Chart

Become a premium member

Get daily Elliott Wave updates for SP500,DAX, GOLD, SILVER, CRUDE, FX, CRYPTO, etc. or apply for unlimited access to the Elliot Wave educational videos.

Commodity

Coffee Is Getting Expensive

Funded Trader Program

Trade our money and collect the profits.

Learn Elliott Waves

Access to more than 7 hours of educational material

Crypto

DeFi Index Is Extending Higher

DISCLAIMER

Any reviews, news, analysis, prices or other information contained on our website is provided as general market commentary and delivered electronically through a distribution channel to larger number of clients, therefore does not constitute investment advice or investment research. We are not trading advisors. Most of our work is for educational purposes only, with information based on Elliott Wave theory in real time. Trading forex, futures, options, stocks, cryptocurrenices or any another trading market carries a high level of risk, and may not be suitable for all investors.

The possibility exists that you could lose some or all of your initial investment; therefore you should not invest money that you cannot afford to lose. Our website and the information that we provide should not be relied upon as a substitute for extensive independent research before making your investment decisions. In no event will we be liable for any loss or damage on your account in connection with, the use of our products. For any real cash investments you have to contact your financial advisor.

Any information or material contained on our website is owned by Val Global d.o.o.. Reproduction is prohibited without Val Global d.o.o. prior license in writing.

By continuing to use the site, you agree to the use of cookies. Learn more.

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.

Close