Morning traders,
Markets are higher today after progress in fiscal negotiations in the US. President Barack Obama expressed optimism that a deal can be reached to avert fiscal cliff..

I have few charts here which suggest risk-on moves could be seen in this week. The first chart is the S&P500 which rallied sharply on Friday after hitting 1443 low. Notice that market closed above the falling trend-line connected from 1433 high after five waves down in wave v) of (c). In fact, I can see the bullish reversal daily candlestick (new low followed by a close above the previous high)which in many cases indicates a trend change.

I also checked the S&P Futures which reversed higher after the prices perfectly reached our triangle measurement projected level around 1341. Current rally also occurred after a triangle in the latest downtrend. We know trust out of a triangles are final and they usually complete the larger trend, which is another reason why think that recovery may follow in this week. In fact, I can see five wave rise from current low...

We know that if stocks will rally then USD will most likely fall in value. With that said, I still like this ending diagonal formation on USD Index, which in fact is showing signs of a top after recent fall to 81.00 level. I expect more weakness here, which means more gains the EURUSD.