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Chart Signals: Indices break out of bases as JPY plunges

Chart Signals: Indices break out of bases as JPY plunges

January ended with indices broadly breaking out of bases, and RSI confirming upturns in momentum. At the same time, the Bank of Japan’s surprise rate cut crushed JPY and sent JPY pairs soaring. It’s possible that we could see some trading corrections to start the week but overall it looks like the selloff of early January has run its course and recovery trends appear to be underway.

Asia Pacific indices

Australia 200 is breaking out of a base, with a rally back above 5,000 confirmed by the RSI clearing 50. The index has advanced on 5,075 with support rising toward 5,045 a Fibonacci level with next potential resistance near 5,145.

Hong Kong 50 has broken out of a saucer bottom that formed between 18,600 and 19,500, rallying up toward 19.720 before correcting back toward 19,600. RSI advancing on 50 indicates confirmation of a breakout pending. Next upside resistance possible near the 20,000 round number test.

India 50 is trying to turn up out of a downtrend, rallying up off a higher low near 7,400 to test a Fibonacci level near 7,515 with next potential resistance near 7,600 then 7,750.

Japan 225 is breaking out of a base clearing 17,410 then 17,440 prior highs that could become support and driving on toward 17,875 with net potential resistance near 18,000 then 18,200. RSI regaining 50 confirms momentum turning upward.

North American and European Indices

US 30 is breaking out to the upside rallying up off its 16,000-16,030 support zone  through its previous high near 16,225 and driving on toward 16,475 while support rises toward 16,400. The index nearing 16,500 and the RSI nearing 50 suggest a pause for a rest possible in the short term while breakouts would kick off a new upleg.

US NDAQ 100 is bumping up against prior highs near 4,280 with next resistance near 4,310 having blasted through 4,195 Fibonacci resistance. RSI confirms downward pressure fading and an upturn pending.

US SPX 500 keeps working its way back upward climbing back above 1,900 from a higher low near 1,885 then driving on toward 1,940 a Fibonacci hurdle with next resistance possible near 1,955 then 1,975. RSI nearing 50 where a breakout would confirm the start of a new uptrend.

Germany 30 is trading back above 9,780 a Fibonacci level which has become higher support while the index advances on 9,840 with next resistance near 9,890. Higher lows and lower highs are forming a symmetrical consolidation pattern, indicating a pause within its rebound while RSI gaining on 50 indicates base building.

UK 100 is breaking out with the index clearing 6,000 and driving on toward 6,125 while support moves up toward 6,085 a 23% retracement of the downtrend that started in April. RSI clearing 50 confirms momentum turning upward. Next potential resistance near 6,715.


Gold has slipped back under $1,120 into the $1.111 to $1,118 range in a normal trading correction with more support at the $1,100 round number. RSI still trending higher indicates underlying upward momentum intact through this correction phase. Next resistance near $1,128 the recent intraday peak.

Crude Oil WTI has been holding above $32.40 retesting a Fibonacci level and the breakout point of a saucer bottom base as new support. It has started to advance again toward $32.90 with next potential resistance at recent highs near $33.85. RSI above 50 confirms upturn in momentum.


US Dollar Index has bounced back above 99.00 toward the top of its 98.20 to 99.60 trading channel with RSI indicating sideways momentum. Significant resistance remains in place at the 100.00 barrier.

EURUSD has slumped back toward the bottom of its $1.0800 to $1.1000 trading channel having run into resistance near $1.0970 again. Currently trading between $1.0810 and $1.0840 with RSI confirming sideways momentum.

NZDUSD tried to peek back above $0.6500 but failed to hold it and dropped back into the $1.6460 to $0.6480 area signalling continues resistance with next support near $0.6420.

AUDUSD peeked above $0.7100 but slipped back inot the $0.7060 to $0.7080 in what looks like a normal correction within an emerging upswing which remains intact as long as the RSI remains above 50 and the pair above $0.7000.

USDCNH is starting to turn downward again, falling from 6.6280 resistance down through 6.6090 a and 6.6000 toward 6.5950 with net potential support near 6.5785 then 6.5585.

USDJPY has exploded to the upside, blasting through 119.00 and driving on through 120.00 before levelling off near 121.00 near its 200-day average with support rising toward 120.60 and next resistance possible near 121.80.

EURJPY ran into resistance near 132.00 with more possible at the 200-day average near 134.20 but now has slipped back toward the 130.80 to 131.30 area in a normal correction of a big breakout rally. RSI confirms momentum still turning upward.

CADJPY continues its big rebound, blasting up through 85.00 and on toward the 86.10 to 86.60 area where it could pause having retraced 50% of its declines from November. RSI driving up through 50 confirms momentum turning upward. Upside resistance emerging at its 50-day average near 87.00.

USDSGD continues to roll over with RSI breaking down under 50 signalling a downturn in momentum. Resistance falls toward $1.4170 with the pair trading near $1.4240. A break through $1.4200 would confirm the start of a new downtrend with net potential support near $1.4040 then $1.4000.

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