July brings us optimism on the market, which was pretty much expected after what happened on the global stocks at the end of June. Fundamentally there is not much to be happy about. The pandemic is still far from being controlled and we are drowning in debt. Rises on the market are driven mostly by freshly printed money and maybe partly by the hopes that even when the second wave will happen, governments will not impose another strict lockdown.
As expected in the past few days, S&P 500 is heading higher. There was a false bearish breakout from the symmetric triangle which led to a rise and a bullish breakout from the pattern. As long as the price stays above the upper line of this formation, the sentiment is positive.
A few days ago, we also mentioned EUR/USD and we said that it looks like the price is ending a bearish correction and is getting ready for another bullish wave. Call us not surprised, when indeed EUR/USD defended the 1.12 support and later broke the upper line of the flag. Price closing a day above the upper line of the flag will be an invitation to a new bullish wave.
Yesterday we analyzed the USD/JPY, where we mentioned 107.55 as crucial support. We focused more on the breakout though and that is exactly what happened, the price went below this area. From the recent price movements, you see that the 107.55 is important as currently, we are testing this level as resistance and traders are pretty accurate with it. As long as we stay below, the sentiment is negative.
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