Forex

Market Update: The Interplay of USD, Bond Yields, and Stock Markets Ahead of the Extended WeekendFeb 16, 2024

The recent trading sessions have witnessed the US dollar facing downward pressure as stock markets rallied and bond prices rose, setting the stage for an intriguing dynamic ahead of the extended weekend due to the upcoming US holiday on Monday. This shift marks a notable reversal, erasing some of the movements observed earlier in the week. A key factor in this changing landscape is the correlation between the dollar index (DXY), bond yields, and the S&P 500. Traditionally, the dollar tends to weaken alongside yields when stocks are on an upward trajectory. This pattern might resume if US 10-year Treasury yields dip below the 4.2% threshold and maintain that level. Additionally, recent remarks by ECB’s Villeroy, suggesting an urgency for the European Central Bank to consider a rate cut, could further influence a downward adjustment in yields.

From a technical analysis standpoint, employing the Elliott Wave Theory offers an interesting perspective on the dollar’s trajectory. The DXY’s current intraday pullback from its wave (C) resistance hints at a potential downtrend. However, for a bearish confirmation, a fall below the 103.36 level would be critical. Higher resistance is at the 78.6%, at 105.23.

dxy vs yields vs sp

Become a premium member

Get daily Elliott Wave updates for SP500,DAX, GOLD, SILVER, CRUDE, FX, CRYPTO, etc. or apply for unlimited access to the Elliot Wave educational videos.

DISCLAIMER

Any reviews, news, analysis, prices or other information contained on our website is provided as general market commentary and delivered electronically through a distribution channel to larger number of clients, therefore does not constitute investment advice or investment research. We are not trading advisors. Most of our work is for educational purposes only, with information based on Elliott Wave theory in real time. Trading forex, futures, options, stocks, cryptocurrenices or any another trading market carries a high level of risk, and may not be suitable for all investors.

The possibility exists that you could lose some or all of your initial investment; therefore you should not invest money that you cannot afford to lose. Our website and the information that we provide should not be relied upon as a substitute for extensive independent research before making your investment decisions. In no event will we be liable for any loss or damage on your account in connection with, the use of our products. For any real cash investments you have to contact your financial advisor.

Any information or material contained on our website is owned by Val Global d.o.o.. Reproduction is prohibited without Val Global d.o.o. prior license in writing.

By continuing to use the site, you agree to the use of cookies. Learn more.

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.

Close