Diary of a Financier

Chart Updates: SPX (ES) & EURUSD

In Capital Markets on Wed 15 Feb 2012 at 09:09

Just a quick update on the charts of EURUSD & SPX, two markets at the center of everyday discussion…

Here’s a snapshot I took of EURUSD back on 2/10, since which the pair has dropped from 1.3176 to 1.3078:

EURUSD- H&S waistline support held, but rising wedge breaking to downside...

As EURUSD has traded like a risk-gauge, I think a lot of the sell-side is waiting for the corresponding pullback in equities.  I don’t think a real correction is coming quite yet.  The EURUSD/SPX relationship is an imperfect pair becoming more loosely correlated–currently 0.499 v 0.60 in November 2011. Equities will fade this quick EURUSD decline, but they’re all due for a pause per the SPX analogue to 2010, wherein you find the Cup & Handle classical pattern awaiting takeoff:

ES 2010 analogue (daily)

ES 2010 analogue (monthly)

…but intraday fractals and general momentum say that any near-term (i.e. this week) break in the action will be short and sweet.

–Romeo

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  1. […] developments today, so I wanted to enter a couple quick Chart Updates to update my last updates: February 15*: I don’t think a real correction is coming quite yet… [but equities are] due for a pause […]

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