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That was quite a market storm, with violent, volatile moves, and it doesn’t seem to be over.

What are the next levels for EUR/USD, GBP/USD and the S&P 500? JPM answers:

Here is their view, courtesy of eFXnews:

The negative performance of leading risk markets is clearly ruling the market action in different asset classes and given the dynamics behind the latest sell-off, there is likely more to come, says JP Morgan.

Projected targets for an indicated 4th wave setback in the S & P 500 are for example cutting in between 1761 and at 1690/58/34 (int. 38.2 % on 4 scales), which looks to be the minimum target for the ongoing setback,” JPM projects.

Reflecting that in EUR/USD, JPM sees a possibility of extending higher for a test of the key-T-junction at 1.2959 (in. 38.2 %) as long as key-support at 1.2569 (minor 76.4 %) is not broken decisively on hourly close (i.e. below 1.2550).

This projected wave 4 target at 1.2959 (int. 38.2 % on higher scale), according to JPM, remains in focus where a perfect risk reward would be given to bet on the missing 5th wave decline towards 1.2418 & 1.2215 (Fib./w. trend).

In Cable, JPM thinks that as the pair manages to hold above the key-pivotal support around 1.5854,  the door for a bounce remains open.

“But for the latter to really start weakening the prevailing down-bias it would take two consecutive higher hourly closes of the lagging line above the Ichimoku-cloud (currently at 1.6118),” JPM argues.

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