Market update - Jan 28th '09

EURUSD: Upper momentum is still there, however we do see some uncertainty so a reversal is possible today at this level. We knew this is a retracement trade on the daily chart with moderate potential in the short term.

ER: Overbought and on a Fib resistance level, a retracement would be in order. If ER passes this level (~460), an Expansion pattern is likely to form with a target close to early Jan highs. Should this scenario prove incorrect (always possible, even if unlikely), S&R (Stop&Reverse) levels would be 445 and/or 437.

ES: Same story here, however if we take correlation with ER into consideration, we see that the retracement is almost inevitable even if the underlying trend will remain intact. There is still some upward momentum in the short term, then a retracement to 843, or maybe down to 832 will be necessary. On the daily chart, while a Fib Expansion pattern is forming, it is also clear here that it is not going to be a smooth ride still.

( posted 5:45 AM UK)