Elliott Wave Analysis

Elliott Wave Live: US Dollar Stalls at Resistance Despite Upbeat Jobs DataApr 8, 2024

Hey everyone.

On financial markets, we observed a rebound in the stock market last Friday, an interesting development given the strong U.S. jobs data. Despite an initial surge, the U.S. dollar experienced a decline later in the day, amidst speculation that the Federal Reserve might hold off on rate cuts if the economy maintains its momentum. A pivotal element to watch this week is the U.S. inflation report due on Wednesday. Additionally, rate decisions from the RBNZ and the BoC are scheduled for the same day, with the ECB announcement to follow on Thursday. This sets the stage for a potentially volatile week, particularly for XXX/USD pairs, given the mixed signals across the board. In commodities, metals are trending upward, and the USD/JPY pair has risen, likely influenced by higher U.S. yields. Conversely, crude oil prices have dropped as Middle East tensions eased, following Israel’s withdrawal of additional forces from southern Gaza.

Examining the latest dollar index chart reveals a notable short-term reversal pattern pointing downwards, especially if stock markets continue to find support. It’s interesting to note that stocks have risen post-strong jobs data, a situation typically viewed as bearish in the current financial cycle since it suggests a reduced likelihood of Fed rate cuts. So is this market reaction, short-term bullish?

The Dollar Index (DXY) displays a clear five-wave decline, hinting that a weakening dollar could further bolster stock support.

Cryptos are breaking lower, but we see some increase of liquidations up here.

I talked about this and more in our webinar below

Grega

Dollar index elliott wave chart

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Commodities vs Inflation

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