After we broke 122.45 on Tuesday, as we expected we gapped up higher on wednesday. We gapped up to 122.75 and reached a day high of 123.10 before coming off again as US stocks began to rally on FED beige book assessment. Intraday we formed a head and shoulders formation, with resistance at the shoulder at 122.85 and a floor at around 122.70. Looking at this short term, I would expect a test of the 122.45 level closing the gap from yesterday morning, before making a move up medium term towards 124.00.
Fundamentally speaking this longer term view can be supported as it seems increasingly likely ECB will cut further.
Todays we will have earning from JP Morgan, which will set the tone for stocks today. It is likely they will also show that things are getting better, but the real test will be when Citi report as they were given the most bailout money and previously in the most danger of going under. We shall see how it pans out...
No comments:
Post a Comment