Markets started the week in a bit of a risk-off tone—stocks slowed down a bit on Monday , after Moody’s downgraded the US credit outlook over the weekend. But nothing significant so far.

Interestingly, the dollar also sold off, opening with gaps across the board, which— as we know—can eventually be filled. 

From an Elliott Wave perspective, we’ve been eyeing for potential bearish reversal on the Dollar Index last week, and so far the price action supports that view. We’ve seen three waves up from the April lows, and now also some sell-off that signals for continuation lower—especially as the channel support is broken. But the most important to watch is the US treasuries; a completion of five waves down in C, and a turn up/lower US yields can make dollar much weaker, down to 98.