04/10/2007

Futures analysis

The gap has remained unfilled, but today's double test proved to be a warning for the bulls. In a daily timeframe, we have a shooting star candle next to a 'dark cloud cover', both signalling, that the market has stalled for now and the buyers are not strong enough, to lift it past the 3780 area. Selling pressure, which occurred late in the day drove the market all the way back to its open, retracing almost a 60-point rally and finally closed just as the previous day.

If we look at the 15-minute timeframe, we can see that the market was not strong enough to even test previous resistance level around 3780, so it's made a lower high, which indicates that there's active supply force up in that area. The still unfilled gap will be tested yet again and everything is going to be fueled by the news from the labor market in the U.S., which is coming out on friday. Today's action in the EUR/USD might mean, that the currency market has already set up for the upcoming data. The Dow as well as the S&P500 are little changed with two hours remaining before the close, which does not signal any major overnight changes, as for now.