U.S. Dollar Trading Sideways Ahead of FOMC Minutes
2023.01.04 08:41
The has made some nice and strong move on Tuesday, despite US yields turning down, while stocks are sideways. It might have been a New Year change in flows before the market goes back to normal. We can already see that some of those moves are being reversed; on or Cable for example.
However, the market may not go too far now during the EU and US sessions as we think investors will first wait on the FOMC Meeting Minutes today. We may hear something new, as there was not been much commentary from their end lately, due to the holidays.
From an Elliott Wave perspective, we see USD index in a bearish trend, which is now trying to stabilize a bit after an extended wave 3. In fact, there was a divergence on the RSI, so the current slowdown of bearish price action and turn up into a corrective wave 4 is not a surprise. The ideal resistance zone for the next sell-off is at 105.8-107.60, from where we will look for a drop into a fifth wave, while the market is below 110.
The main idea for lower USD going into 2023 can be a divergence between CB. ECB per example is lagging a lot while FED will try to slow down, so this can keep EUR in an uptrend and USD in downtrend. For more details, also check our video below; the 2023 Elliott Wave Forecast.
U.S. Dollar Index 4-Hour Chart
