EURUSD Is Bearish Again After A “Gap Reversal” Pattern

EURUSD fell sharply yesterday after the prices filled the gap from a week back around 1.3050. In fact, pair turned lower after only three wave bounce from 1.2842 which was a clear bearish sign for the pair once prices moved close to lower support line of a corrective channel. As such, EURUSD is back on a bearish track so looking for lower levels makes sense. In fact, market has room for much deeper levels if we consider that pair could be at the start of an impulsive back wave 3 that is part of a wave 5). Reversal zone for current minor pull-back comes in around 1.2900-1.2920 where broken channel line may act as a resistance.

EURUSD Could Fall Much Lower In 2013

Sharp and extended fall through 2012 support line with a monthly price close beneath it suggest that EUR will extend much deeper in 2013. In fact, on the line chart we can see that decline is very clean and directional. Move can be counted impulsively which is bearish sign for the pair, but we expect a three wave bounce back to 1.3150 -1.3250 in the next few days, before downtrend extends.

The reason for a possible top in place on EURUSD is also German Bund market.  For more detail Elliott wave video analysis on this, please check the video below.

http://bit.ly/YCn4lc

EURUSD Could Find a Low When S&P Completes a Downward Correction

Markets are back in the range and trading sideways now after a reversal lower yesterday on US stocks. The S&P500 cash market moved close to 1538 support which of-course also pulled down the others as well, such as DAX and even NIKKEI futures. Meanwhile, we still have unresolved situation on EURUSD, where both counts from yesterday are still valid. 1.2880 remains key level for a push down to 1.2810. But as already noted few times this week; we think that sooner or later EUR will recover.

EURUSD 

The S&P futures moved down to 1534 which now could be trading in wave C of an incomplete corrective retracement from 1558 high. If we get a bounce from 1526 support on S&P then EURUSD should find the bid as well because the correlation is tight on the intra-day basis, as shown on the overlay chart below.

S&P Futures count

S&P vs EURUSD

Generally speaking, we think that risk-on will resume, but probably next week once S&P bottoms, when also some new opportunities for USD shorts could occur. For now it's better to avoid any new positions and wait on break out of the range. Grega

 

S&P 500 Remains Bullish After A Corrective Retracement To 1537

S&P500 cash market gapped lower in this week, exactly after prices tested 1560-1570 resistance area for wave (iii) as highlighted several times to our members last week. As such, latest retracement should be wave (iv), which made three sub-waves down and found a support at very typical 38.2% Fibonacci support level compared to wave (iii). With that said, larger trend remains up as we need one leg up to complete a five wave rally from 1485 Feb 26 low. Ideally market is now trading higher in wave (v) headed through 1558 high which will open the door for a push up to 1578 projection, where wave (v) equals to wave (i). 

http://bit.ly/WFNgxU