The US Dollar Index (DXY) has made a clear three-wave decline from the October highs, which appears corrective and ideally represents wave four. We are now seeing a nice recovery in the dollar, as recent weakness across global equity markets, particularly in technology stocks, has raised concerns that the election outcome could lead to tighter regulations for the AI industry, adding some support to the US dollar as investors reassess their risk exposure.

From an Elliott Wave perspective, the three-wave decline suggests that the broader bullish structure may still be intact, with more upside expected within wave five. Ideally, this recovery could take the index back toward the October 2026 highs, especially if DXY manages to break above the upper boundary of the downward corrective channel and achieve a daily close above it. Such a breakout would strengthen the bullish outlook and increase the chances of a continuation higher.

All eyes are now on today's NFP (US jobs) report, which could provide the next catalyst for the dollar and broader financial markets. Stronger-than-expected employment data could support the dollar recovery, while weaker numbers may delay the expected move higher and keep the corrective structure in play.

Disclaimer:This article represents the opinion of the author only. It does not represent the opinion of Webull, nor should it be viewed as an indication that Webull either agrees with or confirms the truthfulness or accuracy of the information. It should not be considered as investment advice from Webull or anyone else, nor should it be used as the basis of any investment decision.