The net effect of the ECB stimulus package was to leave stock indices and commodities nervous and the Euro trending higher

 

Indices

 

Australia 200 made a higher high last night but peaked neatly at the 78.6% Fibonacci retracement and 200 day moving average. This level is now resistance.  Rejection of this level would be bearish. This would be indicated by the daily candle starting to make lower highs and lower lows.

A break below this week’s low at 5081 would be a sign of weakness as would the RSI breaking below its channel support and the 50% level.  Overlap below the 5046 support would be a big picture sign of weakness.  This would imply a correction of the whole A to D rally or even a new leg lower.

Australia 200 CFD Daily Australia 200 CFD Daily

Germany 30: Last night’s volatility saw the market whip higher but peak neatly at the harmonic AB=CD level. This was followed by a break below the previous peaks. Combined with the fact that the RSI has rolled over below 50% this is a bearish development.  There may be a deeper correction to the 61.8% or 78.6% retracement levels around 9193 or 8974. It’s also possible this could be the start of the next leg down with a break of 8696 to follow.

Last night’s peak at 9997 is now resistance and a move above that would change this negative outlook.

Germany 30 CFD Daily Germany 30 CFD Daily

US SPX 500 is basically range trading around the 2000 resistance.  A break outside the range of yesterday’s candle 2011/1968 may set the next direction.  The 38.2% retracement around 1933 might be the initial objective for a move lower. If things go the other way and last night’s high is taken out, the harmonic level and 78.6% Fibonacci retracement around 2030/2042 may come into play.

 

Forex

 

EURUSD put in a bad whipsaw session. In the big picture, EURUSD has the look of a large descending triangle pattern consisting of 3 swing internal moves. A rally to and failure at the 78.6% Fibonacci retracement around 1.2587 could see completion of the latest swing setting up for a return to the triangle base line around 1.05.

Alternatively a move up through triangle resistance around 1.134 could see a test of the 1.1377 peak

EURUSD CFD Daily EURUSD CFD Daily

AUDUSD Aussie continues to pause around the resistance of the last major low around .7534. RSI reached the overbought zone above 70% meaning traders will be alert to the possibility of bearish divergence set ups developing from here on up. The 4 hour chart is now showing bearish RSI divergence while price is forming what could be a broadening top pattern. Another rejection of this pattern resistance could set up for a decline to break support around .739.

However, if this resistance line is taken out the next levels are the previous lows around .7598 and 61.8% Fibonacci retracement and harmonic level around .7650.

AUDUSD CFD 4 Hour AUDUSD CFD 4 Hour

Commodities

Crude Oil Brent: Not much change here with the daily candles still trading inside Tuesday’s range.  On the May 15 Brent chart, the recent peak is still at the 50% retracement. A decline from here followed by a break of support at $36.27 would be the big picture bearish scenario for oil. If it continues to push higher, the 61.8% retracement around $44.70 will come into play.

Gold bounced off a retest of pennant support at 1237 and this level now provides support. It’s now approaching a 61.8% projection of the “flagpole” height from the bottom of the pennant. However, the next major resistance level is the past peak

Gold CFD Daily Gold CFD Daily