Morning traders , just a little look around through the charts and market moves we have witnessed on Friday after the GPD q/q Came out at 1.6 better than expected at 1.5 and bernanke dovish testimony , the equity markets gained some momentum to bounce off the important lows it was testing at around 1040-1050 level which i warned about before in previous Blog posts , and risk currencies rallied specially the commodities Like Aud And Cad in to around 100 pips high against the dollar while the Euro looked kinda weak in compared to this rallies and couldn't break above the bearish consolidation flag it has been in for sometime now.
- S&P 500
looking at the charts ,, starting with the s&p 500 , as shown in the charts , we have a head and shoulders pattern developing on the 1H chart which needs to break above 1032 level to validated it and take the prices to possibly new highs of the year , 1040-50 level needs to hold to keep this scenario possible as i dont see any support till the yearly low to hold the trend of it break down from it and that will take as to the daily chart head and shoulders pattern that has been developing for like few month now , this scenario if validation will take the equities to a dramatically slide down , but in this case we must have a solid fundamental case as well to validate this count which i cant see for sure right now , but planning the trades comes out from the daily and monthly charts first and deepen into the hourly charts , and i cant turn my back on this possibility as i see it quite clear on the charts.
- Eur.Usd
as shown in the chart its still contaminated within the Bearish flag pattern and needs to break up from it to invalidate it and the 1-2 1-2 Elliott wave Bearish scenario , i m expecting the 1.2800-50 level to possibly contain the trend if it continues to act weaker against the dollar than the other commodities currencies , i m looking at another Elliott wave count that puts 1.2910 as the wave 4 top which will act now as resistance to hold the trend for possible Wave C Or 3 slide lower , in case this line got broken , i would still need to see a rally to 1.32 or a break of the 1032 level in the s&p 500 to get more optimistic regarding the eur future but for now , i would rather trade the Aussie lower as the risk that can be put against the yearly top is limited to around 200 pips , rather that the Eur
- Aud.usd
as shown in last week chart , i m still seeing the kind of move down we have seen last week as a correction similar to what happened before on the way up and i need to see it breaking down from 88 level to validate the 3 wave or possible c wave correction down , if i see the price action trading near the yearly highs i would possibly take a short trade with low leverage and limited risk for possible break down the lows , , that would come at around 90 / 91 resistance zone , still i wont be confident with such trade cause the daily chart looking much like a correction than an impulsive move down , but at the end we r at the middle of the top and bottom area and the direction should be known pretty soon and the s&p 500 will shape the next move , i m expecting more gains in the risk currencies by Monday and possibility Tuesday which will put all currencies very close to a medium term levels to test , will keep the charts updated to possibly try to capture the next move with maximum efficiency
- The dollar index looking like it ll head for a correction after 5 waves up which could be wave 1 of 3 or wave b of 2 , in either cases , i m seeing the next 2 candles or so bearish then if the 81 level holds we could see the next leg up in the dollar
Cheers (( Sherien ))
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