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Chart Signals: Bear trap for the Aussie 200, Japanese markets getting overextended

Chart Signals: Bear trap for the Aussie 200, Japanese markets getting overextended

The big rally in JPY and selloff in the Japan 225 appear be nearing extreme levels with the potential for a snap back move with RSI divergences appearing. Australia may also be starting to bounce back following what looks like a potential selling climax. NZD and AUD have been bouncing back taking advantage of a weakening USD.

Asia Pacific Indices

Australia 200 broke 5,750 and then bounced up off of 4,700 into the 4,800 to 4,830 zone in what looks like a classic bear trap bottom. A positive RSI divergence also suggests recent downtrend ending and an upturn pending with next resistance near 4,910.

Japan 225 is breaking down today, taking out its January low near 15,805 after failing to hold above 16,000 on a rally attempt. Recently trading between 15,720 and 15.880 with next potential support near the 15,500 round number. RSI nearing oversold and a positive divergence suggest potential for a washout and trading bounce.

Hong Kong 50 has been trading sideways in a  broad range between 18,610 and 19,485. The index finished last week falling from 19,330 toward 19,090 holding 19,000 with initial resistance near 19,170 then 19,290.

India 50 is breaking down again taking out its January low as it drops in the 7,180 to 7,260 area. A retest of 7,055 a Fibonacci level or even the 7,000 round number appear possible with RSI indicating increasing downward momentum.


North American and European Indices

US 30 has rallied up off a higher low near 15,920 back up through the 16,000-16,030 zone and on toward the 16,1115 to 16,165 area before settling back for a retest. A higher low in the RSI suggests increasing support but it needs to retake 50 to confirm an upturn.

US NDAQ 100 has completed a double bottom near 3,900 rallying back up above 4,000 into the 4,101 to 4,040 area which has emerged as new support. Next upside resistance appears near 4,105 then 4,055 and 4,080 a Fibonacci level. RSI lifting up off 30 indicates downward pressure weakening.

US SPX 500 continues to recover, climbing from a higher low near 1,845 toward 1,870 with next potential resistance near 1,890 then 1,915. Higher lows in the RSI indicate renewed accumulation and fading bearishness.

Germany 30 has a nice turnaround underway. Yesterday’s doji candle suggested the market was coming back into balance while today’s rally up from 8,800 through 9,000 and on toward 9,120 before settling back a bit indicates bulls have regained the upper hand. RSI bouncing off 30 indicates an upward correction starting.

UK 100 is rallying up off of 5,600 with a successful retest of support completing a bullish double bottom. A higher low in the RSI indicates downward momentum fading. The index is trading near 5,670 with next potential resistance near 5,765 then 5,855.


Gold has had a down and up day, dropping from $1,192 toward $1,182 then gaining it all back in a bounce toward $1,194 as it digests recent gains below $1,200 resistance. RSI still really overbought means this consolidation phase could be volatile.

Crude Oil WTI remains in a downswing, taking out $27.90 support and falling into the $26.90 to $27.40 area but holding its January low near $26.60 in a test that could end in a double bottom of a breakdown. RSI suggests downward pressure still building for now.


US Dollar Index is sitting on 96.00 having slipped back from 96.20 with next potential support near 95.65 then 95.00 and next resistance near 96.70.

EURUSD has paused near $1.1250 a two Fibonacci levels having set a higher low near $1.1165 earlier in the day and rebounding. Support rises toward $1.1230. It may need to trend sideways in the near term to digest a recent rally and work off a near-overbought RSI.

NZDUSD has turned upward again following successful retest of $0.6560 a recent breakout point plus 50 on the RSI to confirm the current uptrend. The pair has rallied back up toward its 50-day average near $0.6640 with next resistance possible at the 200-day near $0.6700 or a prior high near $0.6750.

AUDUSD is picking up again trading above $0.7100 and testing its 50-day average. RSI holding 50 confirms an upswing underway with next resistance possible near $0.7215.

USDCNH is breaking down today, taking out its 50-day average near 6.5670 and retesting it as new resistance to confirm the start of a new downleg. RSI under 50 and falling indicates downward pressure growing with next support near 6.5325 a Fibonacci level.

USDJPY keeps on falling, diving from near 115.00 down toward 113.90. A new low on trend in the pair, was not confirmed by the RSI however, which is also getting oversold again. This suggests downward pressure peaking and a bounce possible.

EURJPY has resumed its downtrend falling from a lower high near 130.00 into the 127.90 to 128.40 area. RSI confirms downward pressure increasing. Next potential support near 127.00 then 126.20.

CADJPY is bouncing around between 81.50 and 83.00 around 82.45 a Fibonacci level. Initial resistance near 81.90 with next support near 80.80. RSI suggests downward momentum increasing again.

USDSGD remains under distribution, falling from near $1.3960 confirming $1.4000 resistance down toward a test of its 200-day average near $1.3890 with next potential support after that closer to $1.3800. RSI confirms downward momentum.

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