The EUR/USD broke-out on Monday & continues to trade above the falling wedge pattern. Either this breakout sticks & today’s pre-market rally in US stocks is faded or the EUR/USD is likely headed back down towards the 1.108ish level, maybe for a backtest of the wedge pattern.
EUR-USD 60 minute Sept 8th
Regardless of whether on not the Euro continues to move higher against the US Dollar today, both the SPY & QQQ are currently poised to gap up towards the top of the 60-minute symmetrical triangle patterns that were pointed out on Friday. Until a definitive breakout in either direction (which is imminent at this point as prices approach the apex of those triangle patterns), any rips or dips are just noise within the pattern.
With the recently highlighted tight inverse correlation between the EUR/USD and the U.S. equity markets, one of two things is likely to happen today: Either the gains in the EUR/USD since the US markets closed on Friday are given back (remember, the EUR/USD resumed trading on Sunday evening and traded throughout the day yesterday while the US equity markets were closed for the holiday) OR the pre-market gains in US equities are faded, should the EUR/USD breakout stick with the Euro continuing to move higher against the US Dollar in the coming days.
I’ll be monitoring both the price action in the major U.S. stock indices in regards to those 60-minute symmetrical triangle patterns as well as the Euro, US Dollar and Japanese Yen. (plus the $USD Index). There are also a few potentially bullish setups in the commodity arena that may be added as trade ideas soon.