Monday, 3 May 2010

USD and Equities Declining Channels

The USD bounced off the lower trendline of the broadening ascending wedge the other day and is on the way back to the top with a likely target in the 83.3 to 83.5 area. This should add some downward pressure to equities:


The potential declining channels on equities that I posted on Friday are looking very good. Here's the one on the Dow, with the next target in the 10,860 area. The action overnight looks like a bear flag, but I'm not sure I trust that on a Monday:


The declining channel on ES looks less perfect than the ones on the Dow and Nasdaq futures, but the next channel target is the lower trendline in the 1170 area:


I've had another look at gold and redrawn my rising channel after some thought. If I'm right, then gold should meet channel resistance in the 1190 area:


Overall the charts suggest more downside on equities today, but 26 of the last 31 Mondays have closed up, and we may just trade sideways today.

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