that the risk/reward in chasing these indices into new highs (above the June15 highs) has very poor risk/reward. Moreover, I have been arguing for weeks against chasing the uptrend in the US market and given the candle setup on the Monthly charts I would stick
to the strategy of selling rallies rather than buying the dip.
Euro Stoxx 50 Index – testing important support at 3,374-3,379
· The Index continues to put pressure on the 3,374-3,379 support area,
· This area combines the June 18th low and the 200 day moving average and therefore should provide good support
· While above 3,374-3,379 an attempt to fill the gap at 3,544-3,569 is possible. On the other hand, a sustain move below 3,374-3,379 would be bearish and argue for a retracement towards 3,312, 3,189 & possibly 3,036
Strategy: No position, Step aside for now
Dax30 Index
· The Index is putting pressure on the 38.2% Fibonacci retrace of the October 2014-April2015 retracement level which stands at 10,849
· While above it a bounce is possible but given the fact that the Index has broken its uptrend and the setup of the moving averages which are turning lower the main threat at the moment is for a move lower over time
· A sustain move below 10,849 would argue for a move towards the 200dma at 10,582 and then towards the Fibonacci support levels at 10,372, 9,896 & 9,307
Strategy: No position, Step aside for now
EN FP – bullish above 32.94-33.30
· The stock is trading in a rising channel since Octover 2014, channel support is at 33.30 and while above it a move higher is likely
· There is an open gap at 35.66-37.65 and a if we do get a move higher an attempt to fill the gap should be on the cards
· Risk/Reward in playing this idea from the long side is attractive
EUR/USD – Monday bullish reversal still in play and argues for a move higher
· The CCY pair is trading near the 55dma which stands at 1.1132 and following Monday bullish reversal a move higher is still likely
· Support stands at 1.1160 (50% retracement of Monday's reversal), 1.1060 (rising channel support) & 1.0955 (Mondays low)
· On the upside, resistance is at 1.1278 (Monday's high) and then 1.1430 which is the resistance of the short term trend line connecting the highs and then 1.1436 & 1.1467
· Once again, longer term charts favor a move higher over time, I continue to think that chasing the CCY pair lower has very poor risk/reward. Similar long term setups exist on Bullish AUD/USD, bullish AUD/JPY, Bullish GBP/USD and Bearish USD/ILS