ORIGINAL POST: 9:15 AM
We began yesterday’s post with a chart of competing patterns in EURUSD.
Many currency traders disregard H&S patterns in currencies, but I believe they play out more often than not. Mario Draghi’s comments this morning gave EURUSD the boost it needed to reach the neckline and clear the way for further upside.
The RSI shows a probable back test of the neckline, but appears to support our forecast of a bounce to 1.30 or 1.31. This is consistent with my expectation that the smaller dollar channel would break down, which indeed it has.
This should give SPX the boost it needs to clear its red channel on the opening bell.
UPDATE: 9:40 AM
SPX gapped open, and will likely back-test the red channel it broke up through. As I posted yesterday, we can expect at least a pause at the last interim high of 1457 and the .886 Fib at 1459.51.
UPDATE: 10:12 AM
Note that the dollar just tagged a channel line of support on the downside and should rebound here at 79.54. It has more potential downside, but I believe it will need to gather some strength for a push lower.
UPDATE: 11:00 AM
I’m playing the short side for a bit, with an objective of 1452.52-1455 around 11:50 this morning. But, beware of support at the 1457.71 (.618) and 1456.63 (a channel midline.) Best to use trailing stops on this move.
Although there’s an argument for no higher prices period, SPX could definitely go higher than this morning’s 1463.14. I just don’t know if it can manage it today.
Charts in a few…
UPDATE: 11:20 AM
A trend line on the 5-min RSI clearly shows the sell signal.. As often happens, it came a good 10 minutes prior to the broken trend line on SPX itself.
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