Three Great Trading Setups: SP500, USD/JPY and GBP/USDAs President Donald Trump tweeted 20 hours ago, S&P reached the all time high.
In the nutshell, US is doing great and has a great upward potential. My opinion is a bit different but who am I to judge. All time high on this index is a fact. If I had to pick a reason for that it would be a new QE program or injecting liquidity into the REPO market, as they like to call it in FED (avoiding naming it QE).
Technically, SP500 broke the upper line of the symmetric triangle pattern. That should be the beginning of a new uptrend. The prices are so stretched though that even with this technical situation, it looks less likely to happen. Anyways, as long as the price holds above the red line, the buy signal is on and sellers are in defensive.
Interesting setup can be spotted on the USDJPY, where we do have an inverse head and shoulders pattern, which is already up and running as the price broke the neckline of this formation. On the weekly chart, you can see that the place, where this pattern is formed is not random. We bounced from the 104.6, so the lows from 2018. After the breakout of the 109 resistance, the price will be ready to test the mid-term down trendline. Sentiment here is positive.
Last but not least is the GBPUSD, which is in the positive territory after bouncing from the long-term horizontal support. Recently, the price broke the down trendline, connecting highs from 2018 and 2019, triggering a mid-term buy signal. Current price movements are promoting further upswing, which should be aiming the long-term black down trendline, especially that the recent climate around Brexit is much friendlier than few months ago.
This article is written by Tomasz Wisniewski, Director of Research and Education at Axiory