The EUR/USD appears to be forming a major top as I stated in a previous blog post. If you look at the above daily charts of the EUR/USD and the GBP/USD you see a major bearish divergence showing here. As the EUR/USD has surged to new highs the past week, the GBP/USD is severely lagging. If this divergence holds and a big selloff occurs, it will solidify the position that the EUR/USD has formed a major top and will sell off thousands of pips. It appears the EUR/USD is mirroring the stock market so the pair should top and reverse in line with the stock market. The 1.4700-1.4800 area looks like a good topping point, but it's just a guess at this point. I'm waiting for a strong reversal day and a five wave decline to get my attention.
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2 comments:
I am looking for the top of the market too, and I cannot see it yet.
For example QQQQ continues your extended rally and many indexes are not near of break the trendline what is support for they.
The AUD/USD is on the mark I had of 261 extension of Fibonacci.
Patience for now.
Patience is key, and the only sign of trouble for all markets is the divergence between the GBP/USD and EUR/USD. When the euro tops, so should everything else.
Support for the S&P is 991. A close beneath there should signal the crash is underway. However yesterday had strong buying demand so this rally probably has a bit further to go unless a big reversal occurs today or tomorrow.
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