Originally published by CMC Markets
Major indices continue to struggle with the DAX completing a head and shoulders top on Monday. The Nikkei 225 also appears to be breaking down while S&P/ASX 200 looks vulnerable. Meanwhile, resource currencies appear to be starting to consolidate recent moves with AUD/USD and CAD/USD both trading near $0.8000 and USD/CAD near $1.2500. Oil is on the rebound while gold has also paused to digest recent gains.
Asia Pacific Indices
The ASX 200 increasingly looks under distribution with the index sliding back under 5,700 and falling below its 200-day average, its RSI stuck below 50 to indicate downward momentum and a bearish descending triangle forming above 5,655. Next potential support on a breakdown near 5,625 then 5,585.
The Niikkei 225 remains stuck below 20,000 and is starting to break down. The index has dropped back under its 50-day average near 19,970 and the RSI has broken under 50 to confirm momentum turning downward. Next potential support near 19,795 a 23% retracement of the uptrend that started in April.
The Hang Seng remains under accumulation, breaking out over 26,780 and holding above that level but running into resistance near 26,890 with more possible near the 27,000 round number. Rising RSI indicates continued upward momentum.
North American and European Indices
The US 30 is hanging around 21,540 consolidating Friday’s drop back from 21,630. RSI falling toward 50 indicates slowing upward momentum. Next potential support near 21,500 then 21, 460.
The US SPX 500 ran into resistance near 2,480 and has levelled off between there and 2,460 while consolidating recent gains and working off an overbought RSI. So far, this appears to be a normal pause within an ongoing uptrend.
US Nasdaq 100 has paused between 5,900 and 5,935 with next resistance near 6,000 and next support near 5,855. A negative RSI divergence suggests upward momentum may have peaked with a near term pause or correction possible.
The FTSE 100 continues to tumble back down after failing to break 7,500 last week. The index has dropped under 7,400 toward 7,390 while the RSI falling back under 50 indicates momentum turning back downward. Next potential support near 7,360 then 7,300.
The DAX is breaking down again today, continuing Friday’s big selloff and completing a head and shoulders top. The index has broken 12,240 a Fibonacci level, falling under 12,200 and starting to fill in the April breakaway gap with next potential support near 12,090. Falling RSI confirms increasing downward momentum.
Commodities
Gold remains in an uptrend but has encountered some resistance near $1,258. Support has moved up to the 50-day average near $1,250. RSI above 50 and rising confirms accelerating upward momentum. Next potential resistance near $1,260 then $1,270 with more support in place near $1 240. `
WTI crude oil held $45.00 round number and $44.85 Fibonacci support and has bounced back up toward $46.20, clawing back much of Friday’s drop down from $47.00. A higher low indicates its underlying uptrend remains intact following the recent correction.
FX
US Dollar Index has paused near 93.80 and may be starting to consolidate recent losses and work off an oversold RSI. A broader downtrend remains well established with the index still well below 95.00. Initial resistance appears near 94.10 with next support possible in the 93.50 to 93.60 area.
EUR/USD has encountered some resistance near $1.1700 and has slipped back toward $1.1645 in what looks like a normal trading correction to deal with an overbought RSI. Additional pullback support possible near $1.1590.
GBP/USD has regained $1.3000 as it continues to climb up off a higher low near $1.2935. RSI holding 50 confirms the underlying uptrend remains intact. Next potential resistance near $1.3040 then $1.3120.
NZD/USD ran into resistance near $0.7455 and has dropped back toward $0.7425 in what looks like a normal trading correction of an overbought RSI. Additional support in a pullback possible near $0.7395 with next upside resistance near the $0.7500 round number.
AUD/USD is bouncing around between $0.7900 and $0.8000 consolidating recent gains and working off an overbought RSI recently trading between $0.7920 and $0.7950. Additional support in place near $0.7880.
USD/SGD continues to trend downward, sliding toward $1.3600 while resistance falls toward $1.3630 from $1.3680. RSI near oversold but confirming downward momentum for now. Next potential support near $1.3570.
USD/JPY has bounced up off of 110.60 Fibonacci support toward 111.15 but remains in a downtrend with RSI under 50 and falling indicating increasing downward momentum. Initial resistance possible near 111.65 with next downside support near 110.00.
GBP/JPY has found support and is starting to stabilize above its 50-day average near 144.00. The pair still needs to retake 145.00 and 50 on the RSI to signal an upturn with next resistance near 145.80. Next downside support possible near 143.30 a Fibonacci level.
EUR/JPY is sending mixed signals. Higher lows indicate accumulation and support has moved up toward 129.30 but a recent double top near 130.50 and a falling RSI indicate recent upward momentum may be slowing.
USD/CAD continues to trend downward, testing support near the $1.2500 round number. RSI is really oversold so it wouldn’t take much to spark a bounce but for now, the downtrend remains intact and downward momentum is still accelerating. Next downside support possible near $1.2460 with initial rebound resistance near $1.2550 and $1.2615.