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EURUSD held above good support from the 55 day moving average and the 6 month uptrend line at 1.2985/75 last week. We have resistance at 1.3090/95 today but above here we look for a move to 1.3145/55. This may be enough of a rally for today so watch for a high for the day but be ready to buy back in to longs above 1.3170 looking for a move to 1.3200/07 as the next target.
We could find a floor at 1.2985/75 if this is tested today so worth exiting shorts and buying in to longs here. However a stop loss is required below 1.2950 as a break signals continued losses to 1.2920/09. Exit shorts here again and buy in to longs looking for a low for the day. Use a stop loss below 1.2880.
FTSE future is looking for a test of 2011 highs at 6086/95 this week. This should be tough to beat as it is such a major level and so it is worth exiting longs here. Any shorts will need a stop and reverse back in to longs above 6105 however for the next upside target at 6144.
If we fail to break last week’s high at 6062 look for some light profit taking to target support at 6012/07. Watch for a bounce from here today back up to 6033 and then towards last week’s high at 6062. However longs will need a stop below 5992 as a test of 5973 is then very possible, where we would expect a low for the day if seen.
Dax futures reached our target of 7772 and pushed on to 7805. We are back at levels not seen since early 2008 and a break above 7805 today will target 7826 initially but a push through 7836 could then signal continued strength towards 7899.
Bulls need to be a little cautious with the market so over bought in the short term. Failure to break 7805 could trigger some light profit taking with a 7727/23 a likely target. Watch for a bounce from here today but any longs here need a stop below 7700 as a break lower would signal a move to 7675/72 support. We would expect a low for the day here if seen.
Eurostoxx future has reached our target of 2712 and this has so far held the rally. We may see a little profit taking at the start of this week therefore with 2687/84 the first target and support, but there is scope for 2774/71 to be tested. Watch for a bounce from here so exit shorts and try longs. A stop is needed below 2666 however as a break lower would then suggest we trade down to 2645 where we should exit any shorts once again and attempt longs looking for a low for the day. Stops needed below 2640 as we can then fill the gap to 2627.
If the market can sustain a break above 2715 we should see the 6 month bull run continue with 2737 our first target for today. If we push through here later in the week look for 2756, possibly 2763/66 for some profit taking.
S&P March futures have resistance at last week’s high of 1463 but we have the momentum to push through here this week and test the 2012 high of 1474. Being a yearly high this is significant and we should struggle here. However a break higher is very possible so if attempting shorts, we need a tight stop and will be looking to buy in to longs again in the expectation of further strength towards the next target of 1489. Above here we can then push on to 1503 and probably as far as 1511 to take profits on
After such a big rally last week we are of course over bought in the short term. Failure to break last week’s high of 1463 could trigger some light profit taking therefore with 1450 and then 1444 likely to be seen. Watch for a bounce from here back up to the 1460/63 area. However longs will need a stop below 1438 as a break should see continued losses to 1432 and quite possibly to 1425/22 which fills the new year gap. Exit all shorts on the approach and buy in to longs here as we look for a low for any correction. We would expect to see a strong bounce from this point but as always we needs to use a stop, in this case below 1419.
Dow Jones Industrial Average Futures tested last month’s high at 13374 and backed away on Friday. If we cannot beat this level today we should see prices drift back to a first target of 13227 on profit taking. This may mark the low for today so watch for a bounce from here. Worth covering shorts on the approach therefore and buying in to longs, but with a stop loss below 13190. A break below here could trigger further selling pressure with 13134 likely to be tested before we see the gap filled and good support in the 13078/58 area. If this area is tested it should offer an excellent buying opportunity.
13374/77 remains tricky resistance today but shorts here will need a stop loss above the 18 month trend line resistance at 13405. We look to buy back in to longs on a break above here with potential for continued strength then towards a new target of 13530.