The following are the intraday outlooks for USD Index (DXY), EUR/USD, USD/JPY, and S&P 500 as provided by the technical strategy team at SEB Group.
USD INDEX: Ready to take the final step higher. The break of the b-wave high has attracted more buying and the index is now only a whisker away from breaking above the wave three high point, 86.75. As earlier we are focusing on two possible targets, either the 161.8% extension point at 87.11 or the upper boundary of the rising channel, which runs closer to 88.20.
EUR/USD: Rechecked the neckline. The pair yesterday initially fell down to 1.2545 before rebounding back up to recheck (and validate?) the break of the “neckline”. If managing to take out 1.2545 we should also see an almost immediate extension south passing 1.2501 (targeting next 1.2335 (161.8% of the mid Oct decline) – 1.2322 (h&s target). If not managing to break lower will open for an alternative wave count, a bear triangle and as such a bounce toward 1.27/28 will take place before breaking lower, targeting the same area as in the primary scenario.
USD/JPY: Breaking past the prior peak. The assumption (however never confirmed) of a fifth wave peak in place at 110.09 has today been proven wrong given the impulsive break higher. An adjusted wave count sets a new possible target at maximum the low 112’s. The still ongoing and growing bear divergence should however still be a real cause of concern to longs.
S&P 500: Steaming ahead for a new high. With the break above 1979 the market decided to immediately go for a new high and there should now be nothing to hinder prices from exceeding the prior peak at 2015.
