Hey traders, I hope you enjoyed the weekend.
The stock market closed higher on Friday, so EU markets are also now holding some gains, it can be on due to optimism regarding the talks between the U.S. and China this week. However, There can be some limited upside on stocks if we consider that some of speculators may turn bearish after Moody's Investors Service has changed its outlook on the US government credit rating from stable to negative.
Keep in mind that change in Moody's (NYSE:MCO) outlook can have significant implications for investor confidence. However, the USD is quite stable here still, it can be in a bullish formation, after three wave pullback from the highs. So we may see some more upside on DXY this week, up to the upper channel line, near 106.50-107 area.
If DXY goes higher, then there can be some retracement for the stock market which is seen at the resistance when looking at SP500, now at 4430 resistance for wave A.
Trade well.
