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Hugo in HTO Trading,

UsaRus: Potential double bottom pattern

U.S. stocks traded lower yesterday, with disappointing data weighing on sentiment and protests in Hong Kong affecting some financial firms with exposure to the region, although they recovered early morning losses as investors looked ahead to a week of economic reports.

Today on the economic calendar we have from the US the Consumer Confidence in September that is expected to rise to 92.5 stimulating economic expansion. On the other hand the Chicago Purchasing Managers’ Index in September is expected to fall from 64.3 to 62.0 still providing a good outlook in the overall economic condition in US.

UsaRus is in a bearish phase but is holding near a daily support zone from 1,095.6 to 1,077.9. The Stochastic is showing an oversold market and we may have a double bottom pattern in formation.

Yesterday we had an outside day, where high and low prices for the day exceed those of the previous trading day. Outside days mark greater volatility in the market price for that day.

Expecting downward move to daily support at 1,078 on a break below the previous day low at 1,099 (scenario 1) or a break above previous day high at 1,116 could push UsaRus to key level at 1,134 (scenario 2)

UsaRus is a CFD written over Russell 2000 futures.