EUR/USD at 61.8 Support?
Good Afternoon,
A pretty quiet day given the huge buildup to yesterday's events. We know it is far from over in Europe, so really, nothing has changed as far as the continued chance of news bombs from the area.
Bigger yet, is the FOMC meeting. For a full fundamental preview, see Friday's commentary.
Technically though, recent FOMC meetings have been a bullish event. I should clarify. The run-up to the FOMC has been a bullish event as traders and investors "dare" the Fed not to cooperate with easing. So it is kind of like a buy the rumor, sell the fact thing. Buy the rumor that they will deliver an accomodative policy and sell the fact when prices get overbought.
Speaking of prices, let's first look at SPX:
Past performance is not indicative of future results
The green is the 50 SMA and the red is the 100 SMA. Also, you can see from the Fibo that we are almost 61.8 back. We have moved up from 1270 to 1347 - not bad! How much further are we going to go?
How much further will we go down in the EUR/USD? We just came off our lows last week and then all of a sudden, started heading back down today. What was bearish for the EUR/USD today?
Past performance is not indicative of future results
Will the 61.8 line hold? It definitely was a huge trend day to the downside today, but unfortunately, no BUFFALO BOUNCES.
Finally, the link between equities and the VIX. We have a clear inverse head and shoulders on the SPX, with a target of (in my opinion) 1390ish. That would be sweet. Look now at the head and shoulders of the VIX. We broke the neckline today:
Past performance is not indicative of future results
What does a lower VIX mean for the markets you are trading and your specific trading strategies?
Happy Trading and Be Environmentally Cool
Coach Brian
Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.
