Before you read the article below, just let me remind you that like each year I will send out a Big Free Elliott Wave Outlook for 2024. Make sure to join us the list and get the analysis straight into your email box.
After plenty of CB policy decisions and actions last week, the market is now trying to calm down a bit as this week’s calendar may not be as volatile as the previous one. But still market participants will be on the watch for BoJ rate decision, RBA meeting minutes, and Canadian CPI tomorrow, UK CPI on Wednesday, and then GDP figures from the US on Thursday. The most interesting and volatile can be the pound, to see if UK inflation data will support the hawkish BoE last week, or will the numbers play the opposite side. Cable moved nicely higher recently, but it can be trading at some short-term resistance for wave 3 as discussed in this article here.
Regarding the dollar, which has been one of the main themes last week; its in a downtrend with room for more intraday weakness, possibly to around 101, but keep in mind that the fifth wave down can be running into late stages this week, so there can be some price stabilization ahead of Christmas holidays. A lot of profit-takings can also show up on equities after this nice run-up, following FED expectations to cut rates in 2024. So if you are planning any short-term setup for dollar longs keep in mind that can be a bit late when looking across the FX rates, and you will need to be very selective. But generally speaking, I am expecting more risk-on at the start of 2024, but just think there can be some pullbacks in the meantime.
If you want to hear more of what I have to say about some of the market moves going into 2024, then please check this video.