This week could get off to another volatile start. Initially, Asia Pacific indices could come under pressure in reaction to Friday’s big selloff in the US and Europe that came ahead of a US long weekend. Toward the end of Friday, however, US indices started to regain their footing, and with crude oil plus a number of indices getting oversold, we could see swings in both directions on indices to start the week.
Asia Pacific indices
Australia 200 is retesting its 2015 low near 4.790 after trading down to 4,760 on Friday. Resistance falls toward 4,820 from 4,865 a recent breakdown point. A growing positive RSI divergence indicates downward pressure starting to weaken but bulls need to step up to call off the current downtrend.
Hong Kong 50 broke down Friday, taking out 19,500 to signal a new downleg underway. That being said, it’s also getting really oversold and should be close to a washout, perhaps around Tuesday’s China GDP report. It finished trading in the 19,045 to 19,195 above the 19,000 round number, but we could see a bear trap shakeout before this is all over.
India 50 has dropped back into the lower half of a 7,400 to 7,600 emerging trading channel around 7,515 a Fibonacci level. It remains to be seen if this is a base forming or a pause within a bigger downtrend.
Japan 225 broke down Friday, taking out its 2015 low near 16,900 and retesting it as new resistance in a bounce up off of 16,600 support. Oversold RSI suggests potential for a rebound at some point with next resitance near the 17,000 round number.
North American and European Indices
US 30 broke down through the 16,060 to 16,160 range and has been retesting it as new resistance which could confirm or call off the start of a new downleg. Next potential downside support near 15,930 the 15,850. RSI still near oversold levels so we could be getting close to a selling climax.
US NDAQ 100 bounced up off of 4,080 Fibonacci support well above 4,000 round number support and rallied back up into the 4,120 to 4,160 area. Initial upside challenges appear near 4,195 a Fibonacci level then Friday’s high near 4,275.
US SPX 500 was able to find support near 1,860 and rally back up toward 1,885 but it really needs to retake 1,900 to call off the current downtrend with next potential resistance near 1,925 then 1,940 if successful. RSI oversold suggests potential for a trading bounce.
Germany 30 resumed its downtrend in a big way Friday plunging from near 10,000 which it failed to retake down toward 9,410 before rebounding toward the 9,470 to 9,510 area. Next resistance near 9,570 with next support at the 20145 double bottom near 9,320. RSI falling from a lower high confirms broader downtrend intact.
UK 100 is retesting its 2015 low near 5,760 having falling from a failed test of the 6,000 round number down through 5,830 which may become resistance. Next measured support possible near 5,660. A positive RSI divergence suggests downward momentum may be peaking.
Gold continues to climb up out of a saucer bottom bouncing up off its 50-day average near $1.076 to set a higher low then retaking and holding $1,086 trading up toward $1,.094 with next resistance near $1,100 then $1,110. RSI successfully testing 50 support indicates consolidation continues.
Crude Oil WTI remains in a downtrend. A rebound attempt off of $29.20 has faltered near $29.60, short of the $30.00 round number and recent breakdown point. RSI really oversold so the potential for a reversal at some point remains high, but until we see more of an upturn, its current downtrend remains intact with next measured support possible near $28.00 on trend.
US Dollar Index continues to level off in the 98.20 to 99.60 range below 100.00 resistance. RSI sitting on 50 confirms sideways momentum.
EURUSD is bouncing around between $1.0890 and $1.0920 near the middle of its $1.0800 to $1.1000 consolidation range. RSI lifting up off 50 indicates neutral to slightly positive momentum.
NZDUSD bounced up off of $0.6410 toward $0.6460, correcting an oversold RSI but remains below the $0.6500 round number resistance level it would need to retake to call off the current downtrend. Next upside resistance near $0.6590 on a breakout with next downside support near $0.6300.
AUDUSD is breaking down again, having taking out $0.6900 channel support which may become new resistance. Recently trading between $0.6840 and $0.6860 next potential measured support may appear near $0.6800. RSI oversold but confirming downtrend intact so far.
USDCNH is holding steady near 6.6090, a Fibonacci level having bounced up off of 6.5600 support with next upside resistance near 6.6190 then 6.6260 and 6.6340. RSI holding 50 confirms underlying upward momentum remains intact.
USDJPY continues to consolidate recent losses in the 116.50 to 118.50 range while working off an oversold RSI. So far, this looks like a pause within an ongoing downtrend with next potential support at the August low near 116.20.
EURJPY has slipped back from 128.20 toward 127.60 with a symmetrical triangle forming between 166.90 and 129.10 indicating consolidating within on ongoing downtrend with next support possible at the 2015 low near 126.15.
CADJPY is testing 80.00 round number resistance trading between 80.25 and 80.55 having broken 81.55 to signal a new downleg. RSI is extremely oversold so a bounce remains possible but we could see some kind of selling climax or bear trap below 80.00 first.
USDSGD continues to struggle with $1.4450 resistance with RSI suggesting upward momentum levelling off. So far this looks like a pause within a bigger uptrend with next support near $1.4400 then $1.4315.