The Fed decision and outlook has sparked a number of major moves in currency markets. USD has soared over 1% sending gold and other majors down 1-2%. This action has sparked big breakdowns for gold and JPY along with bearish reversals for EUR and CAD, particularly with oil down 4%. Indices are also starting to decline with the US30 falling away from the 20,000 level.
Market moves have been so fast I have had to update these comments several times through the writing process. It remains unclear if this is a buying climax for the US Dollar or the start of a new upleg. We could still see big swings in both directions today as bulls and bears try to hash this all out.
Asia Pacific Indices
Australia 200 continues to struggle with 5,600 channel resistance having slipped back from 5,580 toward 5,560 on the Fed decision. RSI indicates underlying upward momentum intact through this downdraft. Additional support in place near 5,515 with more resistance near 5,610 the July high.
Japan 225 continues to trend higher rallying from near 19,160 toward 19,360 with next potential resistance near 19,500 then 20,000. RSI remains really overbought indicating potential for a correction with next support near the 19,000 round number.
Hong Kong 50 is sitting in the middle of a 22,000 to 23,000 range near 22,500 having climbed up from near 22,430. RSI holding 40 suggests recent correction may be ending and the broader underlying uptrend may be resuming.
North American and European indices
US 30 took another run at the 20,000 big round number but failed near 19,970 and was knocked back toward the 19,750 level before bouncing toward 19,835. Downward pressure appears to be increasing and next potential support near 19,625 then 19,500 and 19,390 a 23% retracement of the post-election rally. RSI remains really overbought and has just started to roll over suggesting upward momentum may be peaking.
US SPX 500 is starting to break down having run into resistance near 2,275 and fallen back toward 2,250. RSI sliding under 70 from overbought a bearish signal kicking off a correction with next potential support near 2,220 a 23% retracement of its recent advance.
US NDAQ 100 has started to falter, running into resistance near 4,960 short of the 5,000 big round number and has dropped back to retest its 4,900 breakout point with next support after that possible near 4,850. RSI has broken out of a downtrend confirming an upturn in momentum.
UK 100 continues to struggle with resistance at the 7,000 round number while RSI levelling off suggests sideways momentum still dominates. The index is holding above 6,925 trading between 6,930 and 6,980 as it bounces around between 6,860 and 7,035.
Germany 30 continues to consolidate recent gains in the 11,130 to 11,340 area while digesting a rally and working off an overbought RSI, recently trading in the 11,230 to 11,310 area. RSI slipping back under 70 from overbought signals a downward correction may be starting.
Gold is breaking down today taking out $1,150 and causing a base building attempt to fail. The metal price has dropped toward $1,142 with resistance falling toward $1,152. Next potential support near $1,132. RSI remains oversold but the bears don’t appear willing to give up yet.
Crude Oil WTI is falling back in what looks like a deepening trading correction with resistance sliding from $53.20 toward $52.40 initially. After the Fed, oil broke $51.55 its previous $51.55 breakout point where it completed an ascending triangle base, sliding toward $50.80 with next support after that closer to $50.00.
US Dollar Index has rallied to retest the top of a 99.75 to 102.00 trading range which could end in a big breakout or a double top. RSI climbing up off 50 indicates upward momentum accelerating again and its uptrend resuming. Initial support moves up toward 101.00 from 100.65.
EURUSD has been pounded down from the top toward the bottom of its $1.0500 to $1.0685 range recently trading near $1.0530 with resistance falling toward $1.0590 RSI rollover suggests downward pressure increasing again. Next potential support on a breakdown at its 2015 low near $1.0435.
GBPUSD has been crushed after an attempt to break out over $1.2700 a 23% Fibonacci retracement failed. The pair has dropped back toward $1.2570 with $1.2500 round number support holding to keep an ascending triangle base intact. RSI falling toward 50 indicates upward momentum fading and a downturn pending. Next potential support near $1.2355 with next resistance near $1.2640.
NZDUSD has been hammered down form near $0.7240 toward $0.7120 taking out $0.7195 along the way. RSI diving back under 50 signals momentum turning back downward. Initial support possible near $0.7100 then the 200-day average near $0.7055.
AUDUSD has turned sharply downward after the pair failed to overcome resistance at $0.74509 where its moving averages cluster and 50 on the RSI. The pair has been pounded down toward $0.7400 with resistance falling toward $0.7460 and next support near $0.7365.
USDSGD has exploded up off $1.4220 toward $1.4380 breaking out over $1.4360 to signal the start of a new upleg with next potential resistance in the $1.4400 to $1.4420 area. RSI climbing up off 50 signals momentum turning upward once again.
USDJPY is staging a major breakout today, blasting up from 115.00 through 116.20 and driving on toward 117.20 with support rising toward 116.60 and next potential resistance near 117.50 then 118.20. RSI really overbought but confirming the upturn for now.
GBPJPY remains under accumulation, clearing 146.25 a Fibonacci level advancing on 147.20 with next resistance on trend possible near the 150.00 round number. Initial support rises toward 146.60 from 146.00.
EURJPY continues to trend upward with higher lows confirming ongoing accumulation even though RSI overbought again signals potential for a correction. An ascending triangle continues to form between 120.90 and 123.40 with next potential resistance near the 125.00 round number then a measured 125.90.
USDCAD is turning sharply upward driving up off $1.3100 toward $1.3300 RSI rallying toward 50 indicates a big relief rally underway. Initial resistance possible at the 50-day average near $1.3330. Initial support rises toward $1.3230.