Risk-on can slow down a bit due to US-China tension risks as US House Speaker Nancy Pelosi is set to visit Taiwan. Technically, this was a nice run-up on the stock market in the last few weeks, so there can be some correction expected.
Looking at the German DAX chart, there is a nice-looking leading diagonal from the low. It's a pattern in five waves that occurs at the start of the trend, so ideally, the index will travel even higher after a retracement that can occur if the current support line is broken.
From a trading perspective, I still may favor USD shorts once stocks come down into support. When this occurs, I will look at the Aussie, which is coming down after RBA highlighted some concerns on a global scale, but they will stick to their inflation target. The incoming data will decide the next interest rate increase. In Elliott wave terms, we see a-b-c correction now underway with support at 0.6850/80.
