EUR/USD is coming under renewed pressure in European trading after failing to make decisive progress above the $1.30 level over the last 24 hours and also following a much hyped auction of Portuguese government issue, which, despite reasonable results, has failed to reassure many participants (other than the ECB and the Portuguese government officials) that Portugal needs a rescue plan.

In Monday’s letter I suggested that the $1.30 level needed retesting - which ensued - but as the 240-minute chart reveals, the euro failed to make it back towards the more critical $1.3075 level.

Trading could be erratic today as traders prepare for another auction tomorrow of Spanish bonds but the key level to break through for the bears is the low from January 9 at $1.2870.



SLV, which is the exchange traded fund which tracks the price of silver, is revealing rather notable signs of negative divergence. In the intermediate term I would suggest that a return towards the $25 level is possible.



CMF, which tracks the municipal debt obligations of California, has retraced all of the rebound seen in December and once again is on the defensive. As previously suggested, significant rallies in this sector fund should be seen as selling opportunities.



The Mumbai Sensex Index has bounced off the 19000 level during the last two trading sessions as anticipated.

A more robust testing of the 200 day EMA at 18,800 level is still a distinct possibility.



Clive Corcoran is the publisher of TradeWithForm.com, which provides daily analysis and commentary on the US stock market.