The following are the intraday outlooks for USD Index, EUR/USD, EUR/GBP, and S&P500 as provided by the technical strategy team at SEB Group.
USD INDEX: Spiked in the target zone. The move up into the next resistance zone, the next target range and the subsequently rejection from it clearly has the possibility to be the end point for wave 3. If the market follows up with a return back into the wedge the probability for a downside turnaround will be sharply enhanced (as false breaks up from a wedge has a strong tendency of falling straight through it and exiting it to the opposite side i.e. to the downside). So great caution with longs should we end today below 85.04.
EUR/USD: Violated an important m/t junction. The break, however non sustained, below 1.2740 was a very important message sent by the market confirming that we on a medium term basis will fall below 1.2042. The spike below 1.2740 together with the still persisting bull divergences (stochastic, RSI, RoC and more) does however impose a clear upside threat calling for an overdue upside reaction. A move above 1.2765 today is expected to trigger more short covering.
EUR/GBP: Sellers rejected, again. Yesterday’s long downside spike, the rejection from the floor of the falling channel since last summer helps painting a picture where the sellers are facing more and more headwinds. Given the completed(?) five wave pattern down from the Sept peak and the two consecutive downside spikes we see a clear potential for a bounce back to at least the previous wave four top, 0.7889.
S&P500: Far deeper than thought…Messy move in the near-term perspective. Yesterday’s dip, eh, free-fall did more than just recheck a mid-body point; it also violated support at 1,969. The low and bearish looking session close puts pressure on dynamic support starting at market at the high end of the bullish “Cloud”. If not stopping here, the Aug7-Sep19 Fibo grid (1,954/1,919) and an "Equality point" within at 1,947 may have to endure a test. Refs above to keep in mind at: 1,976 & 1,992/94.
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