The little H&S pattern we were watching yesterday busted this morning, with a ramp job up to the .786 (so far) of the previous high eclipsing the proposed right shoulder.

I’ll move the RS tag over to this morning’s high for now unless we take out 1465 — at which point the RS would exceed the head height (as per the falling white channel.)

60-min RSI has reached potential resistance here, which pretty much correlates with the importance to the downside case of not exceeding 1468.  But, as discussed yesterday, there’s no guarantee the market will start acting rationally now.

The dollar and euro are similarly at important inflection points — though the current pauses appear to be just that, and not impending reversals.

EURUSD is retesting its rising wedge lower bound…

…while its daily RSI, demonstrating negative divergence, suggests there is more downside ahead.

The dollar reached an internal channel line (white) and reversed to complete a back test of the recent broken red channel.

Daily RSI has reached resistance at the short red channel’s upper bound and an internal yellow channel line.  But, the white channel and yellow upper bound offer more upside if the dollar breaks through the white price channel line.

Alternatively, it could bounce along at the channel line until reaching the red .886 at 81.261.  They intersect on Jan 29.   A break through the 81.55 high would open the door to the purple pattern playing out to 82.171 – 83.651.

more later…