Getting Closer!!!!!

This is a chart of the S&P 500 overlayed with the percentage of stocks above the 200-day moving average. Stocks are quickly getting close to that area (-3 standard deviations or 20% above their 200-day)  which helped the bottoming process back in 2016. 

FX Markets Focused on 1.14 & 114

After failing last week at 1.14, the EUR/USD is ranging beneath a trendline that lies near the key metric. It appears to be forming a large triangle, a consolidation pattern that typically resolves when the converging trendlines near one another. In this case, both the top-end of the triangle and a 3-month falling trendline intersect near 1.14. This provides more relevance to an upside breach of the euro through 1.14 vs the US dollar.

Meanwhile, the greenback is flirting with a trendline at Y114 after having traded right up to it last week before Fed Powell doused expectations for future rate hikes. While, the USD/JPY's trendline is not as steep as the EUR/USD's, it is part of a larger pattern, namely a 2-year triangle. This suggests that an upside break would carry more relevance for the pair compared to an upside breach of 1.14 for the EUR/USD.

While the US dollar continues to consolidate what has been a strong year, a solid indication which way it will go next could depend which will go first....114 or 1.14!