Markets turn cautious as stocks pull back, Dollar firms

Gregor Horvat Wavetraders

As you know, the market is showing a bit of uncertainty, with stocks turning lower over the last few sessions. There is a lot going on at the moment, from the situation between the US and Venezuela, to Trump now talking about Greenland, and also highlighting plans to increase military spending by more than 50%. All of this seems to be having some impact on profit taking in stocks, which started to turn lower yesterday. In fact, the S&P 500 saw a pretty strong decline during US hours, and it looks like we could see some more weakness, or at least sideways price action, until the jobs report is released tomorrow.

Looking at the dollar index, I still see this move as a corrective recovery that could extend higher. I am not fully convinced yet whether this wave is already finished or not, but in either case the most important resistance to watch remains around the 99.30 area. Until that level is tested, other major currencies could still be under some pressure and move lower.

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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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