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As we all know markets moved significantly last week in favor of stronger USD after the FOMC statement and notes that the US Federal Reserve may start to begin tapering the quantitative easing program this year, if the country continues on the road to economic recovery as expected. This means they want lower unemployment rate in months ahead.

So, as mentioned above, USD is trading higher based on this news, while commodities, metals and stocks are falling. So after a long-time we finally have correlations back in normal shape, at least for now.

Market Correlations (Eur vs. S&P)

corrleation 06-24-2013-intra-day
Based on strong moves last week we think that the USD will continue higher also in this week, so we are interested in long USD positions.

On the next intra-day count for E-mini S&P500 we can see five waves down to 1570 from where we would love to see a three wave rally before downtrend resumes. For now that’s not the case so ideally we will see test of 1597/1600 area before weakness resumes which should then send EURUSD lower as well.

S&P Futures 1h

sp 06-24-2013-intra-day