This is the end of the summer break and markets aret starting to behave more coherently again. ES and TF hit their 1062 and 600 targets on Friday, and the Euro also settled on anticipated 1.2665 support level. When all markets end the week on their targets, we can only gauge the energy left in the ending pattern and chances of bounces or shock absorption.
ES has not really broken the 4H trading range we’ve been following for over a week and despite some substiantial bearishness on the daily chart seems to point toward a landing on support for a while. It should therefore hover in the lower half of the (4H) range i.e. retracing upward to mid to high 1070s to then congest lower again. Current support (1062) is very strong, but maybe not enough to contain bearish pressure later in the week.
TF is highly correlated as expected and should also hover in the lower part of the (4H) range. It shows a little more bearishness than ES particularly on (D/W) charts, so we’ll check current (4H) lows, then our next target in the low to mid 590s, then probably lower later in the week also.
EURUSD had to bounce somewhere in a support area which did not align perfectly across time frames. This is why the report indicated a wide 1.2645 to 1.2695 range, and the Euro in the end picked mid range on 1.2665 to bounce a little. As mentioned in previous reports, the Euro has to try and find a support level on the weekly chart to confirm the 1H2010 bloodshed is really over. We then indicated the Euro would stabilise and hover in a 1.25 to 1.35 range. Let’s rather focus for now on the next day or two: after hovering abore support, 1.2695 should be fought again to be eventually passed to aim lower to probably hit the lower part of our support range (~1.264). It may go lower still, so we’ll review support levels as we go along later this week.
( Posted Sunday AM UK )
