Market update - Jan 29th '09

EURUSD: The anticipated upward retracement is now over (we did rate it with moderate potential only) and the underlying downward trend visible on the daily chart is taking the lead again. It is not yet clear how far it will go though. Our immediate target is 1.305 for now and then somewhere close to Fib Pr2 and Stall i.e. on or just below 1.30 (it is likekly to go lower at a later stage).

ER: should climb to 483, even if again we don't see ER completing the Fib expansion pattern to 520 in the short term. We'll first watch ER's behaviour on 468 which should be a test support level towards our target. Should it fail to hold, retracement will be limited anyhow.

ES: same story, except that ES hit a strong resistance already on 875. Shall we therefore see ES retracing first implying some (momentary?) decorrelation with ER. We do reiterate that our daily patterns do not indicate any sort of strong recovery just yet.

( posted 7:20 AM UK - screenshots available on request)