After testing the 1310-1313 support area successfully, ES climbed steadily, passing the 1320 resistance (highs) in a breeze to reach (1H) Fib. It then came back to 1320 to confirm a new support.
ES is now back in the same target area around 1326. All (2H+) time frames are still pushing, and will probably reach 1345 in the next week or so. Shorter time frames also show a lot of resilience but will probably have to pause a little either on current target or near 1336.
TF followed the same path, passing resistance easily as well. We had noticed high volume up bars early in the day which tend to set the tone even followed by some marginal profit taking. On Friday, the market just followed through in a breakout manner and the next target area is now clearly in the 826-830 area. Longer (D+) may even aim higher. The possible end to the political crisis in Egypt may even provide a boost on shorter time frames on Monday.
EURUSD was easy to follow on a 10-pip Kase chart on Friday. (1H/2H) time frames still indicate that this profit taking is probably a temporary upward retracement (“false recovery” pattern), so an opportunity to short again soon is clearly there (check same 10pip Kase). This time however, (D/W) are only in a mild bearish congestion mode so one should not anticipate a substantial drop again. We would therefore keep the same outlook as on Friday.
T-Bond Fut. (US): Current test of former support now turned (2H/4H) resistance (and also Fib) should not prevent further (D/W) drifting to test a firmer support level where the slowly emerging (W) recovery pattern could find a firmer footing.
( Posted Sat AM UK ) – Twitter updates on Monday – EURUSD only
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