Elliott Wave Live: Dollar Pullback as October Fed Hike Bets Fall

Hope everyone had a nice weekend.

On Friday the September payrolls rose only 29k vs ~90k expected, while previous months were revised lower. That pushed the probability of an October Fed hike from roughly 70% a week earlier to below 20% now and helped stocks recover. At the same time oil is trading lower after the G7 release of emergency reserves, while China suspends export of refined fuels because domestic inventories are becoming very low. This week, the main focus will be on today’s US ISM Services, Wednesday’s FOMC minutes and 10-year Treasury auction, Thursday’s ECB minutes, jobless claims and China’s return from Golden Week, followed by US consumer sentiment and inflation expectations on Friday.

Looking at the dollar, we have seen five waves up, with the current fifth wave potentially coming to an end around 102.50. So be aware of some slowdown here in the next few days, especially if price breaks below the intraday channel. In that case, we should look for a deeper pullback into wave four, which we think sooner or later should show up. Maybe now is the time, especially as 10-year US Treasuries are also showing some recovery, potentially within an ABC in wave four.

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I’d love to see you in today’s Elliott Wave Live webinar at 15:00 CET. We’ll walk through the dollar pullback setup, the 10-year bounce, and how this week’s data may shape the next moves — join us live:

Trade well,
Grega