EURUSD - Interesting Comparison.

The charts below show the EURUSD daily in Q4 last year (Top chart). - The lower chart shows the Current EURUSD 8 Hourly chart. The failed Triangle breakout in December 09, and today's strong break up out of the triangle, look strikingly similar.  - Am I guilty of pattern hunting? who knows? indeed it may be too early to say we are in for a similar outcome, however this breakout has occurred right within the 1.3100/1.3150 window I suggested as a target zone for the EURUSD a few weeks back, the chart used back then can be seen here. - Significantly it is just shy of the 38.2% retracement of the entire move lower since the December top. Whether this is a major top or an interim top, this level should provide tough resistance. - Note: The Nov-Dec 09 top was also strong resistance in the form of 78.2% Fib resistance of its entire prior 12-month rally.

A quick note on the SP500. This afternoon's price action has seen a strong rejection of the 200 day moving average at 1114, and the significant 50% retracement at 1115. The correction higher over the past few weeks, appears to have unfolded as a Wedge shape pattern, this is potentially a bearish development. On the other hand the large correction lower since late April also unfolded as a potential Bullish wedge pattern. - This pits these two opposing forces against each other over the next few days. - I believe the battle ground may occur around 1065-1080, with the outcome possibly being decisive for near-term direction.

Further to this, the next chart shows the above opposing wedge patterns in the bigger picture. I have also highlighted a similar set-up, which occurred in 2007. It may be that this 2007 price behaviour is repeating itself. I will keep an eye on this to see how this evolves, as this may have 2 major connotations for the much bigger picture. - Firstly that if the Bull/Bear battleground I have highlighted at 1065/80 can hold, there may be  another approximate 100 point advance. However, if that occurs, then it is possible that this may then set up the S&P for a much bigger fall later following the termination of that rally. Furthermore, that fall could be the precursor to something far more serious as we enter the fall (no pun intended - seriously).
(CLICK ON CHART TO ENLARGE)