Good morning everyone, I hope you had a nice weekend. Hopefully we get a bit more stable price action this week, but as we know, everything still depends on the situation in the Middle East.
Oil is once again on the rise, about we been warning last week and is now moving into the 104 to 110 resistance zone where the upside could be limited. This is an important area to watch, because if we see a bearish reversal, especially if the US does not escalate further with ground operations in the Middle East, then energy could turn sharply lower, which would support other markets.
Looking at the Dollar Index, price is pushing higher after breaking out of the downward channel last week, and it now looks like we are already in wave five, targeting new highs around the 101 area. So at the start of the week, dollar strength still seems to be in place, supported by the risk-off environment as energy prices move higher.
However, later in the week we could see this move coming to an end, particularly once the Dollar Index completes this five-wave rise, which could then open the door for a broader reversal across markets.
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