Dollar remains in downtrend: More weakness to come after rally

Gregor Horvat Wavetraders

We saw another big drop in the stock market yesterday, with SP500 pulling back now around 10 percent from all-time highs. This type of correction has always been proved to be a healthy one since 2023, as each similar pullback was later fully reversed. This suggests we could still see some price stabilization this week. As discussed in yesterday’s webinar, tomorrow could bring interesting price movements, especially if inflation data in US softens due to lower energy prices since mid-January.

On another note, trade tarrfis tensions remain a key market driver, with reports that Canada may take also some actions against US tariffs. This reinforces the idea that no one wins in a trade war, but it could still keep the US dollar bearish as other countries continue responding.

The dollar index is pushing lower, breaking lower with an extended wave three, with an interesting target around the 103 area.Next wave four bounce is a sell.

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Author

Gregor Horvat

Wavetraders

Experience Grega is based in Slovenia and has been in the Forex market since 2003.

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