The USD index has extended weakness yesterday and sent majors even higher after the FOMC meeting minutes with several members saying the statement overstates the rate rise pace. Supportive for majors was also a bounce on the stock market. We see S&P recovering nicely, but the question is for how long this recovery can last!? In fact, USDJPY is not following the S&P and it's because of higher US bonds. If US bonds with continue higher then upside on the S&P can be limited.

On the S&P hourly chart we see five waves down followed by a three wave rally to current 61.8% retracement level. Wave c is quite extended and puts some doubt in bearish view but that's why intermarket analysis matters. We also looked at the German Dax where rally also appears to be corrective because of previous five wave decline. Resistance on DAX fro wave (c) is at 9610-9650. I am thinking to load some shorts for myself in that region.

S&P Futures 1h Elliott Wave Analysis

German Dax 1h Elliott Wave Analysis

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