Markets are relatively slow and trapped in tight ranges, whether we’re looking at stocks or the Dollar Index itself. This is totally normal ahead of the FOMC rate decision, as everyone is waiting for more details to be released.
We’ll see if there are any dovish remarks following the lower-than-expected advanced GDP reading for the first quarter of 2025, but keep in mind that jobs data still looks strong—so the Fed may not be in a rush to cut rates. That’s possibly why we’re seeing US yields trading higher while Treasuries are falling.
Looking at the Dollar Index wave structure, we still anticipate that weakness will resume sooner or later. But due to the sideways price action over the last week above 99, we still can’t say for sure that wave four is completed. Even if we see a rally back to new highs toward 100.50 or even 101, it could still belong to wave four.
For now, I’m waiting for the rate decision to pass. Then I’m sure we’ll be able to analyze the next leg from here with much more confidence. But as I said, sooner or later, I believe we will start tracking a drop into the fifth wave.