What a time to be alive! Sharp, rapid movements on EUR/USD, SP500 and Gold!“May you live in interesting times” is popularly referred as a Chinese curse although there are no real sources to support that. Nevertheless, in western culture, this expression is commonly used now and then. Definitely we can talk about the interesting times on the market right now.
Rapid reversal on the EURUSD, huge drop on the SP500 and new long-term highs on the Gold. What a time to be alive!
EURUSD broke the horizontal support on the 1.111 but it was a false breakout! This kind of a price behavior is very often a strong signal to open an opposite position, in this case – buy. Traders followed that and the price created a beautiful V-shape reversal pattern. The buy signal is ON.
Breaks on the SP500 seems broken and sellers are effectively using this to make nice profits! In just few trading days, bears managed to break all important Fibonacci retracements of the June-July rise. Sellers should not get too comfortable though. SP500 made several V-shape reversals in the past few years, so it is definitely not impossible to do this again. Current sentiment remains negative though and it seems that buying is no longer an option.
Gold is moving from the false breakout to the false breakout. Latest was to the downside, so is promoting a further rise. Buy signal is ON and we need to think about a good place for a target. When looking on the daily chart, only one comes in mind – area around 1550 USD/oz. Chances that we will get there are very high.
This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis