By: Bastian Rubben
The US futures are down this morning after a negative closing last week that came in the first time in several weeks. However, the indices reached levels in which the bullish reversal could occur and if they rise above Friday's high, it will support the buyers. On the other hand, a break-down of the Friday's low might start a significant bearish correction.
Despite the declines of the stocks, the USD did not rise against most of the major currencies, mainly because of disappointing economic data regarding home sales. Therefore, the investors will look forwards for the pending home sales data and Bernanke's speech later today. On the technical aspect, the Euro reached the resistance, which I have analyzed several times during the past weeks, at 1.325-1.33 and if it succeeds in breaking it through, it will complete the "Cup & Handle" pattern under the resistance at 1.35. However, the bearish opening this morning increases the possibility to see the Euro slides downwards to 1.30.
The strengthening of the USD is seen against the pound as well, as the pair GBP/USD tries to break-through the resistance at 1.59, which it has failed to break few times during the previous week. The pair made the "Bull Flag" pattern under the resistance and a strong break-up might take the pair above 1.60. However, stochastic high levels indicates for overbuying situation and therefore the pound might weaken to 1.565.
