EURUSD Breaks Support

EURUSD finally broke support on the rising wedge overnight, and not before time. I am expecting to see a good sized retracement now. My target is in the 1.28 area, though technically of course, the target is 1.22. I've mentioned before that rising wedges often evolve into channels or broadening wedges, and I'm expecting this one to evolve into a broadening ascending wedge, and have drawn in the rising support line on the chart:

GBPUSD, which has resolved into a clear broadening ascending wedge now, is retracing back towards the 1.55 area. I'm somewhat doubtful about this pattern breaking down and support there may well hold:

AUDUSD broke the rising wedge on the daily that I posted the other day. Nice catch braddurden for pointing it out. I'm seeing some support at 0.90 but I think it's more likely we see a fall to the main rising support trendline in the 0.87 area:

Oil completed the bearish gartley pattern I posted, though it was Keirsten who first pointed it out of course, and reached the top trendline of the rising channel. I'm seeing some support in the 79 area, but am expecting a fall to rising support in the 75.50 area:

Dr Copper has broken support overnight and looks likely to return to rising support in the 310 area, and to the extent that copper is a lead indicator for equities, it is currently pointing firmly down:

So far, so bearish, but where does that leave equities? Well, that's all about the rising wedges. In the short term the second of two rising wedges on the ES 60min broke downwards last night. The first wedge broke down last Friday and played out to target at 1104 ES. The second wedge has the same target and with a bit of help from EURUSD, should have no trouble making it there:

If ES can make it back to 1104, then the main rising wedge on ES will be broken, and that is very much the main prize here of course. Technically the rising wedge target indicates back to the July ES low, but more likely in my view we will retrace either to the 1070 or 1084.5 area, or to the 1040 ES area to make the RS on a big IHS that should be obvious on the chart below. I have listed the full range of targets on the daily chart and I am hoping that channels or patterns formed during the descent will make it easier to call this on the way down:

For a number of technical reasons, as I've explained in previous posts, I'm expecting this to be merely a retracement in a larger bullish picture. In EW terms I think we have just finished wave 1 up of a new move up on equities from the July low, and we will have to retrace a long way before I start to reconsider that seriously. That's not because I think the recovery is real or that current economic policies are putting us on the road to sustainable prosperity, but while the rotten fundamentals will bring down this market sooner or later, I'm doubtful about that happening in 2010.

For a good picture of the current EW picture from the bull side, my friend Pug posted a publicly viewable summary last night that I think is well worth a read, and the scenario I have outlined today fits very well with his alternate scenario.