Stocks wrapped up the week on a high note, signaling a shift towards a risk-on environment. However, the anticipated decline in the USD and yields hasn’t materialized just yet. It appears that a bearish turn in these areas may be lagging but could still emerge based on Elliott wave principle, as discussed in our webinar below.
The financial landscape is poised for potential changes with several pivotal economic reports on the horizon. Key data points include decisions from the Bank of Japan (BOJ) and the European Central Bank (ECB), along with the U.S. advance GDP and the Core PCE Price Index. Additionally, the New Zealand Consumer Price Index (CPI) is set for release tomorrow, adding another layer of complexity to the mix.
Market reactions to these developments are yet to be seen, but the USD index is currently approaching resistance. This suggests that the culmination of wave C might be near, ideally peaking around 104-104.30. The conclusion of this rally could pave the way for other currencies to gain traction. The Euro (EUR) and British Pound (GBP) have already shown signs of strength. Furthermore, there’s a growing potential for the Australian (AUD) and New Zealand (NZD) dollars to rebound, particularly as they approach appealing support levels.
As we navigate through these economic indicators and market responses, the coming days could be crucial in determining the next phase of currency and market dynamics.
Hope you will enjoy the video below.
Grega
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