ES sank on very light trading (Thanksgiving) so it is not clear whether we will have a follow through on the downside (likely) or on the contrary some reaction from buyers. We do see a continuation of (2H/4H) swings with no substantial selling yet, at least until (D) resilience (around current 4H lows) is clearly broken. We will therefore be watching that key support level quite closely.
TF has shown more a lot more optimism which we noticed on (D+/W) willing to test highs again. TF therefore tested the strong (1H/2H) resistance level near 735, and unless it catched up with ES after a long weekend break, there is no reason to believe it will retrace significantly on (4H). One should however not overestimate the decorrelation as patterns are similar, with only TF probably delaying the anticipated turnaround on (D/W). Congestion may therefore continue, during which (1H/2H) are likely to provide us with easier swing opportunities. We will be watching higher lows/highs there, with a possible (2H) support near 725.
EURUSD was easier to follow (less impacted by the public holiday in the US), and dropped to the bottom of the target area we gave on Friday morning.
(4H-) time frames do all agree on reduced bearishness above strong support around 1.3285, also trying to hold above (D) Fib around 1.323. This explains the hesitation on a possible bounce point, which stands little chance to take the Euro much higher as bearish pressure is increasing on (D/W) now likely to aim to the 1.31 area…
T-Bond Fut. (@US): Longer term (D/W) players seem to want to keep US above the strong support area it is in at the moment with hesitation and possible swing trading on (2H/4H) as recovery should be capped to (4H) Fib for the time being.
( Posted Sat PM )
Quick update on EURUSD (Mon 5:45 AM UK): (2H-) show a strong support on 1.318, yet as indicated above (4H+/D) are likely to aim further south, even below 1.31 (1.295?).
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