Usd/Jpy
4 Hour Chart trend: Short. Main price points: 94.40, and 99.78. Looking for: Wave ii.
Usd/Jpy traded very close to our 94.40 support area recently, from where prices bounced at the start of the Monday's European session. We can count all the required sub-waves in blue wave i, from where we will be looking for three waves of retracement that should follow during the next few sessions. The most common correction in a second wave is a zig-zag, which may lead us into the 38.2% or 50% area of the previous wave i decline. Traders with a short bias should be looking for a turning point into a lower wave iii in that area, but will also be looking at global equity markets boucing off support; if equities move higher, this pair will do so too.
S&P Futures
Daily Chart trend: Short. Main price points: 875, and 928.25. Looking for: Wave iv).
On S&P Futures we are back with a wave count on the four hour chart, where we will be looking for a move to the downside, so long as the 928.25 holds as resistance. Traders looking for a short move should wait on a three waves of pull-back in the current red wave 2; as wave 1) looks to be completed around the 875 area. Wave 2 usually retraces 61.8% of wave 1 distance, which means that a turning point may appear around the long-term trend-line that should act as a good resistance this week. If the 923 area breaks then we have a whole new outlook. Wait and see, be patient, and watch the reaction to the news that Libor rates are tumbling lower; that could reverse this set-up, just let it test the long side before deciding.
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