Thursday, February 25, 2010

EUR update: 2.25.10

The EUR indeed seems to be leading the Major Pair trend (one can play GBP similarly at a more lagged pace via 60min charts) as confirmed by moves into early morning today. One can see my last post LAST POST CLICK HERE<--( and double check on 60min charts).

Prices are coming to squeeze on the BB's which in my opinion will confirm the downward trend (dollar strength). Fundamental news and sentiment confirms point to futures markets to confirmation of relative weaker economies outside the US.

Indicator analysis shows a lack of divergence giving more support to daily down trends. This daily down trend may lead to a more fuller piercing outside the lower 2nd SD BB on the weekly chart which all points to a temporary whipsaw to the upside that maybe see through next week. However, once resistance is retested around high 1.38, the trend will continue to the downside in the daily charts (SMA perfection bearish formation confirmation). Price pressure is certainly still to the downside.

Any correction to the upside should correct the RSI and MACD which will give indication and allowance for further moves to the downside post correction.

Relation to the SPX:

Past few days we have been seeing equities positively reacting in correlation to a strong dollar. If that is the case, SPX will be up short-term from a FX view point. I was more bearish, but once all the key resistance levels were broken, I had to admit I was wrong short term. Longer term out we will reassess our performance on the SPX. at this point I am looking for numbers closer in the high 1100's into the 1200's before hitting signficant resistence.

1 comment:

  1. I like your lines on the MACD and RSI showing downtrends.


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