Futures and FX Report

US Markets

My observations below should be viewed as general advice and may not be right for you.

Yesterday I was looking for a pullback yesterday into the 1450/1455 for potential low risk buys into this uptrend. Indeed, I said:

“...given the strong upward trend and recent breakout, the higher probability trade remains buying into supports. The key support zone I am looking at tonight is 1455 to 1450 and this could offer a good risk/reward entry. The target for any bounce is a retest of the 1475 spike high for now."

 

The Emini S&P500 made a low of 1455 overnight and has built on gains today given the strength in Asian markets. Price is now trading at 1465 and not far off the 1475 target zone cited above. Thus tonight, I am looking for a bit more strength into the 1475/1480 zone and then I am on the lookout for potential short term exhaustion.

In the bigger picture, the trend remains up and I have continued to emphasis the strong breakout across US Indices above the April 2012 highs. In particular, the Russell Index is on the cusp of a breakout to ALL TIME HIGHS. This is a sign of genuine strength.

S&P500 Daily:

Breakout above the April 2012 highs which is a sign of strength. Only a close back below 1420 would put the uptrend in jeopardy.  

Emini S&P500 15mins:

This is the short term range and pattern I am looking at. Breakout traders should be looking for potential strength into 1475/1480

RUSSELL Weekly:

Consolidation pattern and breakout right at the top end of the range. A market that makes all time highs is a sign of genuine strength. This Index represents a broad spectrum of stocks and mid tier players which is a sign of broader health.

 

S&P500 Emini Key Levels:

Support Levels: 1450/1455, 1410

Resistance Levels: 1470/1475, 1500

Europe

 

From a technical standpoint, The Eurostoxx does appear overextended on the Daily chart and is struggling at the key 2600 level. This Daily setup does concern me but will US strength win out? I dont see a favourable risk/reward setup here for swing traders.

On the short term timeframe I see a potential wedge like pattern and there was an attempted breakdown last night but no new low was made. In sum, the market appears rangebound in the short term from 2525/30 to 2600. A period of consolidation may be needed before a strong breakout can occur above 2600/2625 in the bigger picture.  

Eurostoxx Daily:

This is the Daily resistance zone I am looking at

Eurostoxx 15mins:

Price is beginning to form a wedge type pattern with momentum waning. However, until the low end of this wedge breaks, short term traders could continue to buy into the uptrend. Key support comes in at 2530 to 2550 with breakdowns opening up a move into 2500.

FX Majors

The Bank of Japan announced an expansion of its easing program today in an effort to prevent a rising yen from undermining an economic recovery. The central bank increased its asset-purchase fund to 55 trillion yen ($697 billion) from 45 trillion yen and its lending facility was kept at 25 trillion yen, according to a statement released in Tokyo today (Bloomberg). This announcement has led to a strong bid USDJPY and AUDJPY. Indeed, AUDJPY has soared almost 100pips from a low of 81.90 to 82.90. This announcement has also helped buoy risk assets and the Australian Dollar against its U.S peer.

AS I have been stressing, the Aussie has now pulled back into a great support zone at 1.040 to 1.0430. This could be formidable and a great low risk entry into the uptrend looking for a retest of the 1.06 resistance level. Only a confirmed breakdown through here would make me concerned regarding the bullish scenario. Obviously this pair has now moved away from this original support area and this is good initial confirmation.

AUDUSD 240mins:

Pullback to the key support zone that has held.

 

AUDUSD 60mins:

Bounce out of the support zone and seeing increasing signs of strength. 

AUDJPY 60mins:

I have showed this setup a few times recently and this has now played out. The first target was up to 83.00 and breaks of this open up a potential move into 83.50

EUR 60mins:

This is the short term range I am looking at. 1.3150 to 1.32 remains strong resistance and I anticipate strong resistance up there. 

Commodities

Gold bounced nicely overnight out of the support zone cited here. The trend is now beginning to look tired and has finally hit my target zone in the 1780 to 1800 area. It has been a great run but now I am slightly cautious into here. 

Gold Daily:

Now into the target zone

Gold 60mins:

Yesterday I said, “Last night’s pullback offers a great entry into the uptrend.” This played out with price bouncing sharply. The targets for this move are 1780 and then as high as 1800.