Market update - Jan 16th '09

EURUSD;
BCE cut 50bp to bring key rate down to 2%, and this incidently happened on a pivot level for EURUSD. Technically, despite yesterday's volatility, we're not far from prices a day earlier but we can notice a change in dynamics. Again the current setup is relatively range-bound and can send prices either down to 1.24 or back to 1.40. We'll check 1.315 on the down side, and 1.332 on the up side.

ER: We would like to believe 437 (target given yesterday) was the support level we were looking for. That may be the case, but some profit taking is inevitable (steep swing on the 60mins chart, and bearish pattern isn't complete on the daily chart). Today may show some uncertainty but things should settle within a few days, and we should then see prices rising to 467, 488 and then attack 500 again.

ES: Exact same story here, with some hesitation on the daily chart, but we should eventually see 862, 875 etc. In the short term it is clear that we need to see prices holding above 844 otherwise some profit taking will be quite in order.

( posted 8:45AM UK - screenshots available on request )