A large move is possible in EURUSD, but not yet confirmed. A simple projection (length of head to neckline) would put EURUSD close to parity. This would be extreme, but not unprecedented. It would be very negative for the SP500 as the companies' profit in USD would shrink. Would probably be caused by some turmoil in Europe (e.g. Italy's debt, France's demonstrators, UK's Brexit, Russia-Ukraine conflict). US interest rates would be pushed down due to a move to safety. Given current correlation structure, this would be very negative for SP500. The yield on treasury notes and the stockmarket index are highly positively correlated.
However, the pattern is just in set-up mode and must be confirmed by a decisive break of the neckline. The break should ideally occur before end of February.
However, the pattern is just in set-up mode and must be confirmed by a decisive break of the neckline. The break should ideally occur before end of February.
Commentaire:
Still valid but not yet confirmed. Signal is null until confirmed.