EURUSD may be topping + DAX Index

My first stab at suggesting  EURUSD topping occurred just ahead of the NFPs on Friday. Unfortunately the weak payroll number saw the USD get hit and the EUR rallied from sub 1.3200 to 1.3334. In the 24 hours of trading since post-payroll time, the USD has recovered all its lost ground, and despite the resistance being taken out on Friday, the failure to hold over that resistance has to be seen in a poor light. This may of course just be pre-positioning for the FOMC, or it could be a real sign of impending weakness.  - I have reproduced the original chart of the daily EURUSD updated but with the same levels highlighted. A couple of significant developments since Friday's original chart. Firstly, the EURUSD has breached the rising support line, Secondly, the move higher in Friday and subsequent failure, has created further bearish momentum divergence on the Daily and 4 hourly chart. I am now in the camp that a topping process is occurring, which could see a return broadly to the 1.2720-1.2780 area.  - It would take a sustained move back over 1.3300 to lessen the chance of this occurring, though a re-rest of the support line in the low 1.3200s is quite possible.- Ideally a clear break and hold below Thursday's low at 1.3119 would add weight to this EURUSD topping view.   - The top chart below is the daily EURUSD. The lower chart is the 4 Hourly EURUSD.

(Click on charts to enlarge).

Many Stock markets appear to be at interesting junctures, the SP500 is a whisker away but still below Junes 1132 interim high, Eurostoxx 50 has broken the key 2800 level though is struggling to push higher, whilst the FTSE is consolidating just below an interim high made mid-May post-Flash Crash. However the DAX index last week made a post-financial crisis high, and appears to be trying to break out of an 'Ascending Triangle' pattern, which has been created over the past four months. A successful break out of this triangle could see the DAX make strong gains over the next few months. I would however like to add a note of caution. The DAX is running into strong resistance from two key Fibo levels, these levels are 6409 which is 61.8% correction of the entire drop  from the 2007 high, and 6372 which is 76.4% correction from the 2008 high and bear market correction level. Last week's high was 6387 which took the DAX into this Fibo resistance zone, currently as I write it sits just below 6300. - This 6372/6409 area is thus likely to be the key battleground for the DAX in the next few weeks: How well it breaks above, or how decisively it fails to break this level is likely to determine near-term direction.  -The 2 charts below show the DAX weekly charts. the top chart is 2006-2010, the lower chart is a zoom in of this chart for 2010.

(Click on charts to enlarge).