EURUSD – Recovers very sharply on Thursday/Friday despite developments in other asset markets. As discussed in the Overview section above, with EURUSD’s cross asset correlations weakening so much it seems justified to put a much greater weight on the very pure EURUSD technicals. With this in mind the first notable resistance above here is the 76.4 retrace of the May drop at 1.4711. It does seem likely to be tested. Thinking bigger picture, the underlying patterns, level holds and statistically significant 2-day drop from the highs, seem to make it a very poor risk/reward to actively argue for a move to significant new highs. Overall, best taken a step at a time, with some thought for the significance of 76.4 retraces on EURUSD and also its historic propensity to form double tops, i.e. watch 1.4711 and the old high at 1.4940 very closely.
S&P – Posted a bearish weekly reversal as a continuation pattern. Given the H&S top targeting 1,245.42 which has already been completed, further downside does look quite likely. The first notable support on the daily chart is now provided by the interim low from 18th April at 1,294 and then the converged March low/200-dma; 1,249-1,248.
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