USD is trading higher, at 1:1 vs EUR, which is a very big level. At the same time, we also see stocks moving slightly lower but this can be an only short-term intraday weakness as traders will mostly stay patient or on the sideline till tomorrows important US CPI figures. Keep in mind that if inflation would slow down, just slightly, then this can be the first point to limited interest rate hikes by the FED and US yields may come down and pull DXY lower as well.
From an Elliott wave perspective we see EURUSD moving to a very big level now; currently seen in a fifth wave here around party, As such, I would not be surprised if we see some back and forth moves around this figure, or ideally even a technical reaction higher in the near term. From an Elliott wave perspective, a three-wave rally is something we would normally expect after five waves down from 1.0615.
