Will the sixth try be the charm? SPX has futzed around in our target area for six sessions in a row. Today, we should finally get some satisfaction.
The dollar has broken out of and is back-testing the yellow triangle. Lots of juicy Fib levels ahead, starting with the cluster at 80.758-80.883.
While the EURUSD looks like it’s ready to tumble. The test I’ll be watching closest is the intersection of channels around 1.3253. But, merely popping back down below those falling white channel lines would be a great start.
If I’m right, the falling white and/or yellow channels will take it from here. Note the negative divergence represented by the last two spikes up to the top of the yellow channel. The flatish red channel dates back to the fall of 2008, and every sustained push below its midline — currently around 50.51 — has been accompanied by a nice sell-off in EURUSD.
Japanese finance minister Taro Aso is frantically searching for the “off switch” on the yen-cinerator. In a chat with a legislative budget committee, he admitted: “it seems that the government’s policies have fueled expectations and the yen weakened more than we intended in the move to around 90 from 78.”
The 7 sessions in (and slightly above) our target area are looking tenuous. A dip to the bottom of the white channel could take the pair back to 90.82.
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