I hope you had a great weekend and are ready for a new trading week, which could bring some interesting volatility. As you know, Trump is planning to announce new tariffs today, which could once again shake the market. However, it’s possible that at some point, markets will become less reactive to tariffs, as they know he’s serious about them, so this may not be a huge surprise.
One of the key events this week will be the US CPI data on Wednesday, with expectations for no change at 2.9%. I believe this is another piece of the puzzle that may help provide a clearer picture of what the Fed could do next with rates, especially after Friday’s mixed NFP data, where fewer jobs were created but unemployment fell to 4%.
From an Elliott wave perspective, the Dollar Index still appears poised for more weakness after the current rebound, which is unfolding in three legs. Right now, the price is testing the first key resistance around 108.30. If the price remains sideways or even pushes toward the higher resistance near 109, there’s a chance we could see a bullish triangle remain in play until Wednesday’s CPI report, which could finally trigger a major breakout from current dollar’s range, hopefully to the downside.
For more analysis check our Elliott Wave webinar below.
Grega
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