Short Term We could have a bounce to test the trendline around 1245-50 area in the next 2-3 days and then we can head towards the DCL around 1200-1180 area which is the 61.80% retracement from the December lows. This also means we could form a H&S pattern which once broken it could fall further around 3.5%, the same extension from the neckline to the the 27h February top.
This also agrees with the March seasonality weakness.
Mid Term
Based on ElliottWaves we could place in the DCL this month and start climbing to the 1280-1300 area in 12345, challenge the Trump Elections top and bottomed again on summer in the correction wave. This could be the DCL to impulse us to the moon as many people like to say. Will see, still far away from now, many things still needs to play out.
Even if the odds for a rate hike are around 79.7% based on Investing tool, I´m not on this camp, I think the strong probability might be on June but obviously it will be quicksand the next months. Also we´ve got NFP report this Friday which could move markets either direction.
All Support/Resistances on the chart are Weekly. The blue vertical lines are the US rate hike decisions.
Trade Safe and make money both sides of the waves
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XY might be in play instead of ABC to 1180 afterwards. FOMC next week could extend the leg to 1180 straight and then start climbing back up as it happened in December. I think if we go back up to 1240ish we could attack the bearish orange trendline that comes from 2011 top. This is based on rate hike next week and rate hike on June.
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Weekly 15th March, 10AM GMT We need to close the week at the same level and the pullback will likely come.
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Possible Bearish butterfly to form in the coming days
Let´s see if this plays out to go the 1270-80 area.