EURUSD Triangle update.

The breakdwon fromt he triangle, which I highlighted a couple of days ago has occurred. BUT I am not at this stage convinced that it will be maintained. Re-tests of breakouts of patterns are not unusual, however such sharp breaks, then quick rebounds in my experience are. I will not draw too many conclusions at this stage, but I am watching for a heightened risk that this is a false break. - False triangle breaks can be great trading opportunities: A move over the apex could be a sign that this is a false break. The approx apex of this Triangle is 1.4330, a clean and sustained break through there, which would also mean the closing of the Friday/Monday Gap 1.4274/1.4230 would strongly favour that we have a false break. False triangle breaks often see strong moves in the other direction, suggesting a reasonable chance of a sharp move towards the high 1.4000s, perhaps 1.4800.

It is also interesting to get a perspective on exactly how much damage the Greek debacle has done to the EUR v the USD. Below is a chart of the 10 year Greek Government Bond yield over the past 3 years versus the EURUSD.  Whilst the Greek debacle has no doubt affected the EUR , its actual values versus a range of major currencies (with the exception of the CHF) has not been significantly adversely affected over the course of this year.

SP500 update and Eurostoxx 50

The SP500 continued its recent bullish run and made a clear break Friday over the declining trendline that marked the top of a Falling Wedge pattern. Whilst I now favour gains in the weeks ahead, it is crucial that support at 1070-1100 holds. I remain slightly cautious, given the less than friendly fundamental backdrop, however it is often said that 'Markets climb a wall of fear'. - IF the SP500 can hold the crucial 1070-1100 area, then I fancy a test of the 100 day sma around 1128, which will also coincide closely with the June 1131 high. This 1128/1131 zone may prove to be a key pivot for the next couple of months...

I have also had a look at the Eurostoxx 50 chart. This is a cap weighted Index of 50 blue-chip stocks from within the Euro area. The top chart shows the past 2 years price action, I have also posted (bottom) a chart showing the past 20 years [to get some perspective]: - The price action shows a consolidation phase for almost the past year, which appears to have unfolded as a large Broadening (Expanding) Triangle or 'Megaphone pattern'.  Recent price action has seen a messy consolidation in the lower half of this pattern. This index has however now approached critical resistance, as highlighted by the 100 day sma, and the declining top line of a symmetrical triangle.- I believe a solid break over this resistance would favour a run up to the highs from Dec09/Apr10, on the contrary a failure to clear this resistance would not be looked upon too well and should see a drift or plunge back towards the lows of the past couple of months.
(CLICK ON CHARTS TO ENLARGE.)