I’m torn between “turnaround Tuesday” and “every sunken ship has a chart room”…
All and sundry, us included, were fixated on the unfolding head-and-shoulders top on the daily charts. It is not as though the market missed any fundamental shifts against the greenback, but the trade just got crowded. A few upside surprises unfolded in EUR/USD this morning, like Medvedev beating the SPR drum at the BRIC summit and a shockingly strong ZEW survey helped set off a short-covering stampede.
What are we left with? Lighter wallets, for the most part, but little new knowledge.
S&P futures are only modestly firmer this morning while oil is better supported, back toward the $72.00 level.
1.3935/40 is resistance now on rebounds, followed by 1.3975, the 38.2% retracement of the 1.4337/1.3750 drop. Nothing would surpise us today. Nothing.
