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Risk-On Optimism Continues: S&P 500, EUR/CAD, Swiss Franc

ByAxiory
AuthorTomasz Wisniewski
Published 06/08/2020, 07:56 AM
Updated 01/03/2021, 09:10 AM

The new week is starting without any excessive fireworks. Risk ON mode continues, so safe havens are trading lower and global indices are flirting with the new mid-term highs. Optimism can be widely seen across the globe. If we could name one reason why it is all happening, we would say: NFP. Friday’s number shocked and probably killed all the remaining bears (if they were still any left).

S&P 500 starts this week on the front foot. We have a small sideways movement but it should not concern the buyers. Bears probably can see a head and shoulders pattern here but we had so many of them on this chart that I guess, that no one believes in them anymore. In general, they are great, trustworthy formations but in order to trade them, one should wait for the breakout of the neckline, which was not happening here.

Quick update about the EUR/CAD, which we mentioned a few days ago. We were above crucial support on the 1.505 and we said, that from this point, the upswing should start. It did but unfortunately, it did not last long. Buyers managed only to test the upper line of the flag and that was it. Currently, the price is about to test the 1.505 again and for the range traders, this can be an interesting mid-term buying opportunity, again.

An interesting situation can be seen on our very own Swiss franc index, which perfectly shows you the sentiment towards the CHF. The last few weeks are terrible but it seems that the franc has found a place to rest. This is the long-term up trendline connecting higher lows since the April 2019. We have also one horizontal support, which worked for some time but was eventually broken on Friday. Comeback above the orange area can be an interesting buying opportunity.

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