Markets Rebound on AI Optimism as Traders Await Key U.S. Data

Good morning traders! Global stocks rebounded after Micron Technology delivered a blowout sales forecast, restoring confidence in the AI trade following this week's sharp technology-led selloff. Stocks are still holding a key support level, at least temporarily, so we may see a recovery into the end of the week, which could slow the U.S. dollar's advance. Metals remain near their recent lows, but we may see some corrective rallies in the near term. 

Notice that the 10-Year Treasury Note chart is breaking above its June highs, which suggests further upside potential within wave "c". Such a move could temporarily weigh on the U.S. dollar. However, if the dollar remains under bullish pressure and Treasury yields begin to soften again, the current price action may simply represent a sideways wave "b" consolidation before the next advance in wave "c" unfolds. 

At the same time, the DXY may be trading in the final stages of subwave (v) of wave "iii", which could open the door for a corrective pullback in wave "iv" toward the 100.86–100.45 support zone before the broader uptrend resumes in wave "v". The key invalidation level remains at 100. As long as DXY holds above that threshold, the bullish outlook remains intact. An earlier breakdown below 100 would suggest that a top is already in place, at least from a short-term perspective. All eyes are on today's US PCE inflation report and GDP data, which may have an impact on the market.