Stock market today: S&P 500 closes higher in thin holiday trading
All three Europeans saw the advised dollar supports hold to provide it with a lift back to their hourly price equilibrium resistance… and also break. It’s a positive sign though there are still the 4-hour price equilibrium levels to be challenged but should be broken. Once that is confirmed it should generate greater upward momentum to take it back to its recent highs. Then it should be just a matter of time before it extends to the next higher projection levels.
However, we still need to take this step by step today as the 4-hour price equilibrium areas are quite capable of causing some short term reactions. If I am to pick out just one of the three that appears to have more potential it is GBP/USD that lagged a little yesterday and seems to potentially be on the brink of a much stronger drop compared to EUR/USD. Certainly it does look like it needs to play catch-up to a certain extent.
The outlook for a stronger dollar is, perhaps ironically, highlighted in USD/JPY. The break above 78.40 produced the extension precisely to the bottom of the resistance zone and retracement area. While I could make an argument for one more high I feel the stronger risk is now bearish again with EUR/JPY also appearing to have completed its correction and thus implying resumption of losses. The cross still has some way to go on the downside and the loose correlation seen over the past few months of bearish EUR/USD and USD/JPY still seems very much appropriate.
Add to that AUD/USD and we have a full complement of indications all pointing to the same conclusion… and that may well cause the U.S. indices to topple over also, either directly or in the not too distant future.
Thus, today focus on the dollar upside, take care at initial resistance areas but overall the story remains a dollar bullish one…
However, we still need to take this step by step today as the 4-hour price equilibrium areas are quite capable of causing some short term reactions. If I am to pick out just one of the three that appears to have more potential it is GBP/USD that lagged a little yesterday and seems to potentially be on the brink of a much stronger drop compared to EUR/USD. Certainly it does look like it needs to play catch-up to a certain extent.
The outlook for a stronger dollar is, perhaps ironically, highlighted in USD/JPY. The break above 78.40 produced the extension precisely to the bottom of the resistance zone and retracement area. While I could make an argument for one more high I feel the stronger risk is now bearish again with EUR/JPY also appearing to have completed its correction and thus implying resumption of losses. The cross still has some way to go on the downside and the loose correlation seen over the past few months of bearish EUR/USD and USD/JPY still seems very much appropriate.
Add to that AUD/USD and we have a full complement of indications all pointing to the same conclusion… and that may well cause the U.S. indices to topple over also, either directly or in the not too distant future.
Thus, today focus on the dollar upside, take care at initial resistance areas but overall the story remains a dollar bullish one…