Still all about FX

The near term trade is still moving very much like a typical legacy arbitrage correlation, I'll show you what I mean, not that it has any bearing on the pullback, it's just like I said this morning , "It was too early in the day for the market to hold that kind of move" so now it has to kill some time, play some games. This is exactly the kind of stuff you want to understand so you don't let emotions drive decisions.

Here we are...

 Here's the SPY 5 min in green with the Euro in red, they move exactly alike as the Euro is a sign of risk on and the $USD moves opposite as a risk off currency (when it rallies).

 This is 1 min EUR/USD 3C overnight trade with the negative divergence after the European open at the green arrow, then a slight positive divergence at the 10 am lows and right now as the Euro stretches its legs, 3C is not following it higher so this may be the start of a negative divergence and some volatility to the down side. Nothing on the charts of the averages would prevent that.

The bigger picture of the EUR/USD is this 15 min 3C chart with a large negative divergence, we already saw the head fake move yesterday, this is an ugly divergence and just like the post last night about different timeframes and the "waves" analogy, this move to the far right is like a wave rolling up the beach within an outgoing tide, a newly outgoing tide, but nonetheless.