EURUSD(4h) - bull flag signaling a possible peak nearby in SPY

15 Jul 2013

Was looking for a good indication of where this rally might top. The EURUSD bullish flag has good structure here and a potential long on the breakout above. Also, SPX moves with relative negative correlation to EURUSD (which means, up move in SPX will make relative decline or a much smaller up move in EUR and vice versa on the down move). If this hypothesis holds, given there can be dislocations, SPX will hit its near term peak at 1688 and we could see a move lower there. This is all short term.