Markets gaped on Sunday, particularly against the EUR after five ministers in Berlusconi's party have resigned from the government coalition. Stocks futures are also lower, but based on German Dax wave structure and USD Index price action USD remains in downtrend while stocks could form a bullish reversal.
Last week we posted 4h bullish count for German DAX to our members and mentioned a possible retracement to open gap zone. Well, price is now lower and very close to that "reversal zone" so be aware of a move higher especially if we consider only a three wave pull-back from latest high which we think it was a wave four.
German Dax 4h
German Dax and EURUSD have a positive correlation as we can see on the chart below, so if European stocks will rally then EURUSD should find a bid based on latest data. Meanwhile of course USD is expected to fall further aagints other rivals as well, which is fine if we consider a bearish trend on USD Index.
EURUSD vs DAX