We’ve had a really nice rebound the last few weeks but some of the markets that have been leading the recovery are starting to look overextended and exhausted particularly WTI crude oil, US 30 and US SPX 500, setting up the potential for a correction this week. Some of the currencies that benefitted lately from the falling USD and rising commodities are also looking tires such as CAD, CAD and NZD. That being said, we could see a catch up rally in Asia Pacific indices to start the week which have been lagging the recent global advance.
Asia Pacific indices
Australia 200 remains under accumulation with higher lows in the RSI and the index indicating continued support at higher levels. The index finished last week above 5,200 bumping into support near 5,220 with next resistance possible near 5,300 and next support near 5,185 a Fibonacci level or 5,160.
Hong Kong 50 broke out Friday, driving up off 20,500 through a Fibonacci cluster near 20,700 and climbing toward the 20,810 to 20,850 zone with net potential resistance near the 21,000 round number also a previous breakdown point. Rising RSI confirms upward momentum increasing.
India 50 appears to be resuming its uptrend with support moving up toward 7,515 a Fibonacci level from 7,400 with the index advancing on 7,580 and next resistance possible near 7,690.
Japan 225 has successfully tested channel and round number support near 16,500 plus 50 on the SI keeping its underlying uptrend intact for now and has rebounded toward 16,800 with resistance looming near 16,815 then 16,870. Initial support near 16,710.
North American and European Indices
US 30 continues to advance rallying toward 17,620 with nest resistance on trend near 17,755, RSI getting overbought suggesting potential for a correction with initial support near 17,540 then 17,400.
US NDAQ 100 is still struggling with resistance at its 200-day average near 4,420. Rising RSI indicates underlying upward momentum intact through this pause with next upside resistance near 4,465. Support in place near 4,390.
US SPX 500 has rallied to test downtrend resistance near 2,048 with its next upside test on trend near 2,060 a Fibonacci level. Support has moved up into the 2,040-2,044 area from 2,015. Overbought RSI suggests potential for a correction or consolidation in the near term.
Germany 30 is bouncing around between 9,820 and 9,960. RSI suggests upward momentum may be levelling off while the index struggles with the 10,000 round number, but so far a reverse head and shoulders bottom still appears to be forming.
UK 100 may be running out of gas for now, having peeked above 6,200 briefly but stalling short of its 200-day average then falling back toward 6,180 with next support near 6,100. RSI indicates upward momentum flattening out.
Gold has dropped back toward $1,250 after peaking at a lower high near $1,270. RSI falling toward 50 confirms upward momentum slowing and gold rolling over. Next potential support near $1,247 then $1,237 and $1,228 where the recent rally started.
Crude Oil WTI’s big rebound may be nearing an end for now. On Friday, the price broke out over $40.00 but ran into resistance near $41.25 a 62% Fibonacci retracement then reversed course and finished well down on the day near $38.90 to complete a bull trap reversal, while an overbought RSI suggests potential for a correction. Initial support possible near $38.25 a Fibonacci test then $37.00 and $35.30.
US Dollar Index has stabilized just below 95.00 pausing to digest recent declines in the 94.60 to 95.20 range. It would need to clear 95.75 to call off the current downtrend.
EURUSD faltered near $1.1340 and has dropped back toward $1.1260 within a and into its $1.1200 to $1.1300 trading range. A lower high in the RSI suggests upward momentum may be running out of gas for now. Next downside support on a breakdown near $1.1111.
NZDUSD continues to have trouble with channel resistance near $0.6870 and has dropped back toward $0.6780 with next potential support after that near $0.6610 where its 50 and 200-day averages cluster. RSI stalling out near 60 again confirms it’s still bouncing around in a sideways range.
AUDUSD touched a new high Friday but is looking vulnerable after failing to hold above $0.7660 and slipping back toward $0.7590 in what looks like a bull trap peak for now. RSI near overbought and rolling over suggests potential for a correction. Perhaps back toward $0.7565, $0.7500 or $0.7450.
USDCNH has found some support near 6.4500 and with RSI near oversold again, a bounce appears possible with initial resistance near 6.4705 a Fibonacci test then the 6.5000 level. Next downside support possible at the 200-day average near 6.4215.
USDJPY rallied up off of 111.00 support having completed a triple bottom, toward 111.70 with next potential resistance near 112.20 then 113.35. higher lows in the RSI suggest downward pressure fading.
EURJPY has resumed its downtrend with RSI slipping back under 50 to indicate a downturn in momentum with the pair testing 126.20 as lower resistance and falling toward 125.70 with next potential support near 125.00 then 124.00 on trend.
CADJPY is still trending sideways between 84.55 and 86.20 with more resistance near 87.00 and next support near 83.55. RSI confirms sideways momentum.
USDSGD has successfully tested support near $1.3500 bouncing up toward $1.3590 with next potential resistance near $1.3670 as it attempts to work off an oversold RSI.
USDCAD has stabilized near the $1.3000 round number and could consolidate in the $1.2920 to $1.3130 range in the near term with RSI oversold and a positive divergence indicating downward momentum slowing.