U.S. Dollar Can Extend Its Gains as S&P 500’s Breakout Fails
Gregor Horvat | May 24, 2023 06:27AM ET
Stocks have made a sharp reversal recently, with SP500 falling back to 4150, so it appears it was failure break higher after to overcrowded trade when everyone expected 4200 to be major breakout point. We also see USD still in bullish mode which can extend gains much higher now if stocks will be in risk-off mode.
Kiwi is already falling back which is not a surprise based on Elliott wave terms about we disscsued here for Investing.com readers . Technically this move was expected and even supported from a macro perspective as we were looking for speculators to sell into RBNZ as there was "no surprise" on the schedule. Yes, they hiked, but its always important to look at what to expect in upcoming meetings. The market expects that RBNZ is approaching the end of the cycle, so NZD is coming down big this time. We see the pair falling into a third leg of an impulsive sell-off so more weakenss can be expected after any short-term rally up into subwave four, while USD index is on the way to 105, 107.
Trade well,
Grega
SP500- failure break higher, VIX at the lows.
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