Markets are still relatively slow ahead of the holidays, and there’s no real progression on stocks due to ongoing uncertainty around tariffs. It looks like the focus this week is shifting toward inflation data. Yesterday, we saw lower Canadian CPI , and today UK CPI also came in lower.
These softer inflation numbers suggest that central banks are leaning further toward rate cuts and maintaining a dovish stance.
Tomorrow, we have the
ECB rate decision
, which is expected to deliver a cut—and of course, such moves from central banks could trigger reversals on their respective currencies.
EURUSD
, for example, may move into serious resistance later this week. But before that, we still need to see the completion of the current bearish cycle on the
dollar index
, which we’ve been tracking since the start of the week.
Looking at the Elliott wave structure in more detail, it appears that DXY is still heading lower into wave five, with room down to the 97.50–98.50 zone—an area that could be very important for the dollar index and potential temporary stabilization.
But overall we think EURUSD is in strong uptrend, which will resume, with new opportunities on the long side after wave four retracement.
