Is the bear market over?
Last week SPX closed well over its daily and weekly trendlines, which could be the beginning of a new bull market. SPX closed above 4030 which we mentioned in our previous reports. And this week should be considered the confirmation week. SPX needs to stay above that 4030 support and close this week above that support to confirm that the bear market is over. SPX is currently up by 17% from last year’s low, which means that its 3% away from entering a bull market.
In the next few days, all eyes are on key earnings, but most importantly the Federal Reserve decision, which will be the key going forward. A dovish tone with 25bps could be the best decision for the market.
DXY bounce is finally here
DXY managed to bounce over 102.0 once again after trying to break lower for over 10 days in a row. DXY bounced during the US session and continued to rise during the Asian session today toward 102.30, while the RSI is now pointing higher, suggesting further gains ahead. We maintain our bullish outlook on the short term with a possibility to test 102.50 followed by 102.85 in the coming hours.
Short-term trades update
During last week’s trading, we issued multiple positions on GBPUSD, Gold, and EURUSD. All of these trades are now in profit.
EURUSD failed multiple times to break above 1.09, leading the pair to give up at the end of yesterday’s session. The decline continued during the Asian session today to as low as 1.0830’s. In the meantime, we maintain our bearish outlook unchanged, while our targets remain at 1.08 followed by 1.0760.
GBPUSD also tried to break above 1.24 but failed multiple times, while during yesterday’s trading, the pair gradually declined all the way to 1.2340. The RSI indicator is now clearer than before, suggesting a continuation to the downside over the next few hours and days, while we maintain our target at 1.2320 followed by 1.2270 which could be seen later this week.
Gold’s short position added more than $15 profit so far, as Gold declined back all the way to $1912 during the Asian session today. The coming hours are crucial as Gold is now testing the lower line of the uptrend channel as shown on the chart, while the RSI indicator suggests further declines ahead. We maintain our target towards $1900 followed by $1880.
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