EURUSD Could Find a Low When S&P Completes a Downward

Markets are back in the range and trading sideways now after a reversal lower yesterday on US stocks. The S&P500 cash market moved close to 1538 support which of-course also pulled down the others as well, such as DAX and even NIKKEI futures.

Meanwhile, we still have unresolved situation on EURUSD, where both counts from yesterday are still valid. 1.2880 remains key level for a push down to 1.2810. But as already noted few times this week; we think that sooner or later EUR will recover.

EURUSD

The S&P futures moved down to 1534 which now could be trading in wave C of an incomplete corrective retracement from 1558 high. If we get a bounce from 1526 support on S&P then EURUSD should find the bid as well because the correlation is tight on the intra-day basis, as shown on the overlay chart below.

S&P Futures count

S&P vs EURUSD

Generally speaking, we think that risk-on will resume, but probably next week once S&P bottoms, when also some new opportunities for USD shorts could occur. For now it’s better to avoid any new positions and wait on break out of the range. Grega

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Gregor Horvat

Grega Horvat Grega is based in Slovenia and has been involved in markets since 2003. He is the owner of Ew-Forecast, but before that he was working for Capital Forex Group and TheLFB.com. His feature articles have been published on FXstreet.com, Thestreet.com, Action forex, Forex TV, Istockanalyst, ForexFactory, Fxtraders.eu, Insidefutures.com, etc. He recently won the award on FXStreet.com for Best Forex Analysis in 2016. At Ew-forecast he helps clients and educates them about the Elliott wave principle and how to label and track unfolding patterns in real time. His approach to the markets is mainly technical. He uses a lot of different methods when analyzing the markets such as candlestick patterns, MA, technical indicators etc. His specialty, however, is Elliott Wave Theory which could be very helpful especially if you know how to use it in combination with other tools/indicators. EW-Forecast To be involved in the market effectively, you need the right guidance and resources, and our team can help you to achieve that. Our team is providing advanced informations about Elliott Wave theory in real time. The Elliott Wave Principle gives you a method for identifying the behavior of the markets and at what points the market is most likely to turn. We help new traders who are interested in Elliott Wave theory to understand it correctly. We are doing our best to explain our views as simple as possible with educational goal, because knowledge itself is power!

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