ES fell as expected and even a little further than anticipated.
Needless to say that ES is now quite bearish in the short term. There are a few support levels which may pause the selling for a while, but we would aim for the low to mid 1070s this coming week. More converning maybe is the current pivot point on the weekly chart starting from a 61.8% retracement which could trigger a very bearish Fib pattern. At this point in time, the selling acceleration is alarming, but is way too strong to be sustainable (swing gradient must reduce to something close to a natural angle of repose). This Monday, the 1094 level while briefly penetrated is holding, and can trigger a bounce up to Fib levels (1110).
TF is obviously also quite bearish, but could bounce back to 625 in the short term. We still have conflicting forces across time frames, with the daily chart pointing straight at 610, or even down to lower Fib levels, and the weekly chart, which still does not suggest anything more than a regular retracement. Despite the substantial selling last week, this is in no way a panic situation, unless the daily fib retracement levels break the current channel this week.
EURUSD: 1.416 is a strong resistance which could send the Euro lower. Longer time frames certainly point toward a support level on current lows, and possibly to … 1.373 over the next month or so.
In the short term, EURUSD being prone to breakout situations, we’ll prepare ourselves in case of some sudden buying if 1.416 breaks on the upside. The target would then be 1.423. If bears take control again today, we’ll aim back at lows near 1.404.
I’ll try and post a midday update (Noon Eastern).
( posted 8 AM UK )
