USDCHF stages a multi-month falling channel breakout, triggering further bullish momentum for higher

The double bottom (.8699/.8703) reversal remains intact. The current rebound off the .8856 low (near the 20-week weekly MA and 50% of .8703/.9038 rise) probed above the multi-month falling channel resistance (from .9841 on the weekly chart) to trigger further bullish momentum towards .9038. Bullish studies confirm the view. Above .9038 would stage the key resistance at .9158, near the 200 week MA and the former triangle lower bounds (linking .8931/.9021).

On the downside, a break below .8856 would negate the bullish scenario and retest the .8703/.8699 zone.

Trading bias:

Buy zone: .8920-.8950

Stop below .8856

Target near .9158

USDCHF weekly chart

USDCHF daily chart

USDCHF 240 minute chart

S&P 500 Index (SP) resumes rally towards the 1985.59 YTD high for a retest

Risk is back on Monday.

S&P rebounded off last Thursday’s 1952.86 low (near the 20 day MA) to rise above last Tuesday’s 1976.39 high, forming a 4-day base and opening the 1985.59 YTD high (3 Jul). Clearing the latter would confirm a higher low at 1952.86 and extend the broad uptrend towards the 1994.07 Fibonacci target ahead of the 2000.00 psychological level.  The first support lies at 1969.86 near the 10 day MA. Only a break below there would expose the 1952.86 for a retest.

Levels		Current price from levels	Comments
Resistances
2,004.44		27.34	1.618x 1814.36/1902.17 from 1862.36
2,000.00	*	22.90	Psychological level
1,994.07		16.97	1.5x 1814.36/1902.17 from 1862.36
1,985.59	*	8.49	Jul 3 2014 YTD high
1977.1			Monday close
Supports
1,969.86		7.24	Mon's low near Jul 10 high & 10 day MA at 1971.82
1,959.63		17.47	Jul 11 low near 20 day MA at 1963.38
1,952.86	*	24.24	Jul 10 low near Jun 27 low at 1952.18
1,944.69			Jun 26 higher low near 23.6% of the 1814.36/1985.59 rise
1,925.78			Jun 12 higher low near 50% of 1962.36/1985.59 rise & 50 day MA at 1928.95
1,918.60			Jun 4 low near 38.2% of the 1814.36/1985.59 rise

*indicates a strong level

Trade idea:

Buy on dips to 1959.63 area

Place stops below 1952.86

Target 1985.59

S&P 500 Index 240minute chart

S&P 500 Index daily chart

US 10-year Treasury yield extends declines within a 4-month falling channel, targeting 2.400 again

10-year treasury yields have been on the decline from the 3.040 high (Jan 2), tracing out a falling 4-month channel (as shown on the daily and weekly charts). Near term, the intraday indicators (as shown on the 240minute chart) are bearish, suggesting scope for further downside, extending the latest easing off the 2.690 high towards 2.506 then 2.400, near the channel lower bounds.

On the upside, a quick upside reversal through 2.690 is needed to negate the weakness and signal channel breakout for 2.818 next.

US 10-year Treasury yield weekly chart

US 10-year Treasury yield daily chart

US 10-year Treasury yield 240min chart

S&P 500 Index posted new record level near 14-month rising wedge resistance; extends pullback to relieve overbought condition, targets 50 day MA

S&P 500 Index (SP) posted a new record/YTD high near the 14-month rising channel resistance (from May 2013 high) at 1985.59 before consolidating. Overbought RSI could form potential negative divergence which cautions bulls. Supports rest at 1925.78 near the 50 day moving average (aqua line) which may hold dips. On the upside, over 1985.59 would extend the uptrend towards 2209.2 (equality target of 666.8/1370.6 projected from 1074.8)

SPX daily chart

SPX weekly chart

US Dollar Index stages a 4-week falling channel breakout to signal basing

US Dollar Index (DXY) rebounded sharply higher off Tuesday’s 79.740 low (near 61.8% of the 78.906/81.020 rise) through a series of daily lower highs to signal basing and test the 80.261 (200 day MA), 80.335 (20 day MA) and 80.379 (26 Jun lower high) resistance area. Improving indicators suggest there is scope for further strength through the resistance zone towards 80.494.

On the downside, below 79.952/79.937 would prolong consolidation and reopen 79.740. A push below the latter would extend the slide off 81.020 towards 79.421.

 DXY 240minute chart

 DXY daily chart

USDCAD started oversold bounce after posting new 6-month lows in the vicinity of key support cluster

Usdcad declined off the 1.0962 lower high (5 Jun) for 20 days to reach a new 6-month low at 1.0622 Wednesday. The daily RSI was 15 at Tue’s low, very oversold. As the pair approaches key support cluster including 61.8% of the 1.0182/1.1280 rise at 1.0601, and 1.0616 (Jul 2013 range high) (as shown on the monthly chart), an oversold bounce is warranted.

On the 240min chart, the pair bounced off the 1.0622 Wednesday low to break through the falling wedge upper bounds and the falling 20-period moving average and signal further momentum towards 1.0698, near 23.6% of the 1.0962/1.0622 fall and then 1.0752 (38.2% retracement).

However, a decisive push below the aforementioned 1.0622/1.0616/1.0601 support zone would negate the upside and accelerate lower towards 1.0557 higher low (Dec 2013).   

Usdcad 240minute chart

Usdcad daily chart

Usdcad monthly chart

EURGBP continues to descend within 12-month bear channel; could potentially test 6-year support zone

Eurgbp declined off the .8772 peak within a falling channel (as shown on the weekly chart) to post a new YTD low at .7959 before correcting. The pair is probing below the 12-day rising consolidation channel support to expose .7959 (please refer to the 240min chart). Below there would confirm bearish continuation towards .7886/.7810. Eventually the pair could retest the .7694/.7755 6-year support zone (as shown on the monthly chart)

On the upside, back above the .8036 area and then the 4-month falling trendline (orange) would stabilize.

EURGBP 240 minute chart

 EURGBP daily chart

 EURGBP weekly chart

 EURGBP monthly chart