Us Dollar: Bearish Reversal Likely Thanks to End of Q3 Flows
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The US Dollar is in a pullback mode with some interesting reversals that can be happening because of end-of-the-week/month/q3 flows. We see some impulsive turns on small time frames, so it appears that USD can see lower levels in the near term, while other assets can be in a recovery mode.
Also, the BoJ highlighted some concerns regarding the FX-JPY levels, so this is also another thing to consider when anticipating changes in flows. Plus, we have to keep an eye on US government; a potential shutdown can certainly cause some drop for the US currency.
In this kind of environment, even stocks can face some difficulties. But usually, the agreement is reached in the final minutes, and if it happens, stocks can bounce, and the dollar can drop further. Looking at the DXY chart from an Elliott wave perspective, there is a nice turnaround so far, a small impulse so deeper correction can be seen.
