EURUSD – Bearish Below 1.3120
Although starting off the week, I’d like to show you the 1hr chart below on the EURUSD. After the big sell-off post ECB meeting, the EURO got sold into oblivion, dropping ~200 pips in a few hours.
Now since then, and post NFP, the Euro has been largely contained towards the lows, even though it had a chance to rally, which can be seen via the 1hr chart below.
Hence I’ll look to sell on any weak pullbacks into 1.3000, or an impulsive rally heading into 1.3100. I’ll remain bearish until a daily close above 1.3120, targeting 1.2730 and possibly a move much lower towards the ‘big figure’ at 1.2500.
NOTE: We anticipated a potential heavy bearish scenario for the Euro, with a possible return to 1.2100 in our Euro Price Action Outlook for 2014. That could very well be manifesting right now.
GBPUSD – Scottish Vote Key, Still Bearish
With a recent poll coming out this weekend the independence vote from the Scottish side is gaining favor, one should expect bearish pressure on the Cable this week. The more the polls tilt towards independence, the more likely it should effect GBP negatively. That plus the USD strength will continue to keep the bearish bias in play.
Looking at the price action chart on the 1hr chart below, we can also see a similar corrective structure, which would suggest bulls haven’t come in with any strength, and that bears should remain in control.
Look to sell any rallies up till 1.6440 either playing the key resistance level, or the corrective structure (aggressive traders). Once we are below 1.6257, then there is not much support till the ‘big figure’ at 1.6000, and 1.5921.
S&P 500 – Large With Trend Pin Bar Off Support
As we wrote about in our daily market commentary, the S&P 500 was in a consolidation, bouncing off the key 1995/1990 support over the last several days, offering some good intra-day trade setups to trade with the trend.
We mentioned the key support levels were the 1995 and 1990 to maintain the bullish bias. As you can see, the key US index pinged right off the latter 1990, closing at 2007 to form a with trend pin bar off support.
Most of the buying interest snuck in the last few hours of trading remaining steady up to the close, so the bull trend is still in place.
For now, 1990 is key support for the bulls so the upside is favored while above this level. Next upside targets for bulls will be 2015 and 2025 so look to trade with the trend on weak pullbacks.
