Wall Street closes at a record for the first time since end of January
Good Morning all
As you know, the Fed decided to keep rates on hold yesterday and will base further decisions on upcoming data, especially inflation numbers for March. Until those are out, it is still unclear whether inflation will become the next major issue, particularly with higher energy prices linked to the situation in the Middle East.
The dollar moved higher alongside US yields, which suggests the market is leaning toward inflation remaining a concern and rates staying higher for longer. This supports the view that the Dollar Index can remain in an uptrend.
Looking at the wave structure, we are still tracking a wave four, which may turn more sideways rather than deep if the current move up in B continues toward the previous highs.
Still, it may be too early to look for long opportunities. It would be better to wait for another dip. That could come if ECB today highlights more hawkish risks tied to inflation, which may first trigger some short-term bounce on the euro and cause the pullback for DXY at the same time. In that case, the key support remains in the 98.50 to 99.05 area.