I hope you had a wonderful weekend and are ready for new market volatility this week. As you know, last week we saw a significant decline in the US dollar, so finally, dollar weakness is in play, which in my opinion should continue lower.
Uncertainty in the markets, geopolitical risks, and tariffs will likely remain dominant, and any positive dollar reaction in the near term should be just a temporary move within the ongoing weakness, which could ideally resume after the US CPI report on Wednesday. Keep in mind that energy prices dropped significantly since mid January, which puts less pressure on inflation, meaning CPI report could come lower, and as a result, yields could fall further, which would be bearish for the US dollar.
Resistances on USD Index I will watch is at 105 area.
Other markets that look interesting to me is gold which can rebound from current intraday consolidation, while trades may look for some “safe havens” as stocks continue to decline, but I see SP500 and some key level. But there is no reversal untill market confirms it with an impulsive recovery.
I talked about these and more in webinar below.
GH
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