The US Dollar’s big rally has left it extremely overbought and it appears to be getting close to a peak with a number of bearish patterns starting to form. It seems like traders have been propping up tired US markets through the holiday weekend and we could see more volatility. The same goes for other markets that have rallied following the election like copper. With the big OPEC meeting on Wednesday we could see significant swings for crude oil in both directions this week.
Asia Pacific indices
Australia 200 continues to attract support above 5,500 following a breakout. The index has been trading near 5,520 with next potential resistance near 5,575 then 5,600. Rising RSI confirms upward momentum increasing.
Hong Kong 50 continues to recover with the RSI breaking out over 50 confirming an upturn in momentum. The index has climbed up into the 22,730 to 22,800 area with next resistance near the 23,000 round number and more support near 22,540.
Japan 225 has paused in the 18,280 to 18,400 having run into resistance near 18.500. An overbought RSI suggests potential for a correction perhaps back toward the 18.000 round number.
North American and European Indices
US 30 keeps driving to new highs and keeps getting more and more overbought technically. The index is still trading well above its 19,000 breakout point (which could be initial support in a correction) pausing in the 19,120 to 19,150 range before popping up toward 19,170 at the end of the day Friday. Upside measured tests near 19,180 and 19,350.
US NDAQ 100 continues to struggle with channel resistance in the 4,900 to 4,920 area. Lower highs in the RSI indicate upward momentum weakening and a pullback possible. Recently trading near 4,870 next potential support appears near 4,840 then the 50-day average near 4,820.
US SPX 500 levelled off in the 2,195 to 2,210 area just above its 2,190 recent breakout point to consolidate recent gains above the 50-day average. It took a run at 2,215 late Friday with next resistance possible near a measured 2,270.
UK 100 is quietly working its way higher, trading back above 6,800 near 6,840 with support rising toward 6,790 and next resistance near 6,850 then 6,925. RSI bumping up against 50 where a breakout would confirm momentum turning upward.
Germany 30 is holding steady in the 10,650 to 10,710 above its 50day average within a wider 10,580 to 10,880 range. RSI confirms sideways momentum.
Gold has a big bullish reversal underway today. The metal price held support near $1,172 having completed a common 62% Fibonacci retracement of its previous uptrend. The pair has rallied back up into the $1,183 to $1,193 area. Oversold RSI and a positive divergence indicate potential for a rebound as downward momentum fades.
Crude Oil WTI is rolling over again, taking out its 50-day average near $47.00 and 50 on the RSI to signal the start of a downswing. The price has dropped back toward the middle of its $40-50 broad trading range with next support near $44.40 then $43.80 the 200-day average with resistance falling toward the $1.4590 to $1.4610 area.
Copper is having an inside consolidation day with a doji candle indicating bulls and bears coming back into balance after a big rally. Resistance has emerged near $2.70 with the price dropping back toward $2.65. Resistance falls toward $2.68 with next support near $2.62.
US Dollar Index looks vulnerable with a bearish evening star candlestick pattern forming. A big up day has been followed by a new high and doji candle that suggested bulls losing force and today a rollover from 102.00 toward 101.40 indicates bears gaining strength. Extremely overbought RSI indicates high risk of a big correction with next potential support near 101.00 then 100.00.
EURUSD appears to be bottoming with a bullish morning star candle pattern forming, consisting of a down day, a small new low and an upturn today. The pair has rallied up from $1.0540 toward $1.0600 with next potential resistance near $1.0645 then $1.0685 a Fibonacci level. RSI looks about to turn up over 30 from oversold territory which would signal the start of a trading rebound.
GBPUSD continues to base build currently trading in the $1.2400 to $1.2500 range near $1.2460 just below its 50-day average. RSI on 50 confirms sideways momentum. Next support possible near $1.2355 with next resistance possible near $1.2525 then $1.2600.
NZDUSD is back above $0.7000 and its 200-day average calling off the completion of a head and shoulders top for now. RSI indicates downward pressure starting to ease and a trading bounce underway with initial resistance possible near $0.7060 then $0.7090.
AUDUSD continues to rebound with support rising toward $0.7420 from $0.7350 and the RSI indicating downward pressure easing. Next resistance possible near $0.7460 then $0.7500 and the 200-day average near $0.7515.
USDSGD appears to be peaking with a bearish evening star candle pattern forming and the pair struggling to hold above $1.4300. Overbought RSI indicates potential for a correction with next potential support near $1.4270 then $1.4200.
USDJPY has a bearish reversal underway today. The pair touched a new high on trend near 113.80 but has since dropped back into the 112.60 to 113.20 area. Next support possible near 112.45 a Fibonacci level, then 111.25 a recent breakout point. RSI extremely overbought indicates potential for a big correction.
GBPJPY has encountered resistance near 141.10 short of 142.30 a Fibonacci level and has started to roll over in a normal correction of an extremely overbought RSI. The pair has dropped back toward140.70 with next potential support near 140.00 then 139.05.
EURJPY has encountered resistance near the 120.00 round number which could hold with the RSI indicating it may be due for a correction. Next resistance near 121.10 a Fibonacci test with downside support possible near 119.35 then 118.35 where a Fibonacci level converges with the 200-day average.
USDCAD continues to struggle with $1.3565 Fibonacci resistance slipping back toward $1.3500 with next potential support near $1.3460 then $1.3390 and initial resistance near $1.3530. Lower highs in the RSI indicate upward momentum weakening.