Risk-on sentiment holds as markets monitor US-Iran developments

Gregor Horvat Wavetraders

Good morning, traders!

Stocks are still holding up well after reports suggested that the US and Iran were stepping back from further military escalation, easing concerns over the fragile ceasefire that is supporting ongoing peace negotiations. As a result, continue watching for support and a potential recovery, while the US Dollar remains in a correction that could extend further, as Treasury prices are still looking for a larger corrective rally. The 10Y US Notes chart is still pointing higher within wave "c", which could unfold as an intraday five-wave bullish cycle.

Therefore, after a subwave (iv) pullback, we may see another push higher for subwave (v) of wave "c". A recovery in Treasuries could keep the DXY in an intraday corrective pullback within wave "iv", which may take the form of an abc correction or a more complex wxy pattern before continuing higher in wave "v". The ideal support remains around the 38.2% Fibonacci retracement, where wave "iv" would also equal wave "ii", near the 100.60 level. The invalidation level and the key bull/bear line remain at 100.00.

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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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