Overnight ramp job with decent follow-through. Be careful around 1830.75.
Though, USDJPY is making a bid to push through the white channel midline. If it does? No guarantee of a deeper retrace. Yesterday’s push failed at the .886 (purple grid.) A repeat would see the pair peter out at 104.72 and ES at 1832-1833.
Look for a turn at 10:00 am.
UPDATE: 10:35 AM
USDJPY topped out at 104.66, just a hair below our 104.72 target.
continued for members…
ES and SPX are zeroing in on their .618’s: 1835 and 1840 respectively. A reversal here would set up a potential Gartley or Bat at the .786 or .886 — the deeper retrace we’ve discussed.
Keep an eye on the USDJPY. While the dip from 105.48 to 103.9 was a good start, there’s much more downside to come. But, it won’t necessarily come easy. The red H&S Pattern was aborted yesterday with a close back above the neckline. Of course, this sets up another potential pattern.
The difference between this and the two previous .886 reversals is that it features a larger reversal at the .786, which would indicate a potential rise to the red 1.272 (105.08) or even 1.618 (105.4.) These price levels would jibe with a deeper .786-.886 retrace of the initial drop from 105.43.
A strong downdraft, OTOH, would validate the view that ES is backtesting the broken red channel rather than merely tilting.
We should know soon enough whether the white or grey falling channel will hold sway.
The big picture shows a few choices for channels.
UPDATE: 11:45 AM
Meanwhile, SPX reversed nicely at the .618.
