Elliott Wave Analysis

Elliott Wave Live: USD Dominance, Gold and Crude ReversalMar 25, 2024

Not much has changed since Friday. The USD has remained strong across the board, despite some initial volatility in the FX markets. Initially, the Fed’s dovish stance led to a decline in the USD. However, dovish actions from other central banks soon followed, prompting the dollar to rally while other currencies, notably the GBP and CHF, weakened. The JPY is also under pressure, as speculators are skeptical about any further rate hikes in the near term. Nevertheless, a sudden shift towards risk-off sentiment or FX intervention by Japan could bolster the JPY.

In commodities, both gold and crude oil are poised for potential declines, suggesting that commodity currencies may remain weak. The MXN, however, might not experience any significant drop but could instead move sideways. Stock markets are following their own trajectory, maintaining an uptrend, though the SP500 may encounter resistance as it approaches higher-degree fifth waves.

In the US, the upcoming PCE release on Friday is noteworthy. However, strong data may be overlooked by the market, given that Powell and the Fed seem unconcerned by the recent modest uptick in inflation, possibly anticipating three rate cuts this year. It’s also worth noting that market activity might slow towards the end of the week due to holidays in the EU.

Turning to the DXY, we expect more upside to around 105 and higher

I will talk about this and more in our webinar later today at 15CET.



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