The following are the intraday outlooks for USD Index, EUR/USD, EUR/JPY, and SP500 as provided by the technical strategy team at SEB Group.
USD INDEX: A growing bear divergence. Our view of a potential top (wave 5) in place at the Nov 14 (key day reversal day) was on Friday proven wrong as the market rose above 88.27 printing a fresh trend high. Short term there will probably be some further gains made but in the bigger picture we are still leaning toward the idea that we are in the very latter stages of this bull phase. The growing bear divergence also continues to support this view.
EUR/USD: Back to the drawing board. The unforeseen sharp move lower prematurely ended the upward correction and the violation of the 1.2398/94 support also calls for a new low to be put in place before a new correction attempt might occur, Short term there’s a chance that we will see a bounce into the mid 1.24’s (as benchmark candles often are followed by mid body tests) before tracing out a new low (nearby potential targets are a 161.8% Fibo projection point at 1.2323, a possible wedge floor at 1.2290 and the 2010 support line at 1.2227).
EUR/JPY: Top formation. The Wed – Fri price action has created a potential bearish top formation (a big white advancing candle, a neutral one with a topside spike and then an impulsively falling candle). Also the close back inside the 55d Bollinger bands indicates that we now are leaving the impulsive advancing phase that so far has dominated the month. Short term we expect the market to move slightly higher (146.46? 146.75? 147.12?) before turning lower again. Strategy should hence be to seek a sell in the 146.46 – 147.12 area.
S&P500: Keeps scoring. The grind higher is still on. Local supports are located at 2.055/54 and at 2,048. A fresh high would however likely have to fight with the intraday stretch, kicking already at 2,076. In the long-term picture 2,075 is also interesting since it corresponds to a 261.8% Fibo projection ref so expect some resistance there.lready at 2,076. In the long-term picture 2,075 is also interesting since it corresponds to a 261.8% Fibo projection ref so expect some resistance there.
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