EUR/USD Update
In the currency update, posted yesterday, I stated that we will bust through 1.4100 AND that 1.4100 – 1.4150 area (see blue tint in the chart below) will pose some resistance. Over the past 4 days, EUR/USD has developed a nice upward channel. At this point, I am expecting a retrace down to 1.4000 in the Globex session tonight, which should coincide with ES coming down to SPX 934 levels.
Failure to bust through 1.4100 – 1.4150 region is closely related to why SPX got rejected at 955 levels. The currency action suggests that the upmove in the indices is not finished yet. SPX will touch 934 and then start to move back up again.
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