The EURO is at long-term price resistance, as it faces a great deal of overhead supply above 1.1900, as shown on the following Monthly EUR:USD Forex chart.
Conversely, the US Dollar is sitting above long-term major support at 90.00, as shown on the following Monthly chart.
The following Monthly chart of the Emerging Markets ETF (EEM) shows that the 2-year rally has now hit long-term major price resistance around the 45.00 level.
The DAX:SPX ratio shows that price is caught in between the 50 and 200-day moving averages, near-term price support (5.00) and resistance (5.10), and the 40 and 50% Fib retracements levels, as shown on the following Daily ratio chart. It also faces a great deal of overhead supply resistance above its current price.
The following Monthly chart of the SPX shows that price has further to run before running into long-term uptrend resistance.
Whether we see continued investor support for the SPX, as well as a possible turnaround in the US Dollar, versus a rotation out of the DAX and the EURO, may depend on:
- signals that we see from both the Fed and the ECB during Q4 regarding inflation and economic data
- Ms. Merkel's progress in forming a coalition government
- potential trade headwinds with the EU from the (unpredictable) Trump administration
- political instability in Asia (North Korea)
Furthermore, if buyers take hefty profits in EEM this week, they may favour putting their money into the U.S. equity markets.