Daily Form June 4, 2010

Inter-market Technical Analysis using algorithmic pattern detection

FRIDAY JUNE 4, 2010       07:25 ET

One of the more pivotal ETF’s that I will have on my watch list today is SHY which is the iShares Barclays 1-3 Year Treasury Bond fund.
Any upset of the not too hot/not too cold scenario for the US recovery (apart, that is, from the 17% of people that show up on the U6 part of the employment data) would reveal itself in a break below the trend-line indicated, and that would not be Panglossian for fixed income instruments in general.

$EURUSD has broken below a symmetrical rising channel pattern and now looks headed to a re-test of the recent low just above 1.21
The key question is whether central banks stand ready to protect this level, and with other waves of volatility expected from the NFP data at 8.30 this morning, I shall be sitting this test out for the next few hours.
Trading activity later in the session before the European FX traders leave for the weekend may make the situation clearer.

GBP/USD faces a lot of technical resistance at the level indicated with the arrow on the daily chart below.