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Chart Signals: Positive RSI signals amid carnage, Gold and JPY looking overbought

Chart Signals: Positive RSI signals amid carnage, Gold and JPY looking overbought

Stock markets and crude oil have been under pressure today along with resource currencies like CAD but it looks like we could be getting close to a selling climax with RSI indicators for a number of markets in oversold territory and not confirming price weakness which suggests we may be near a selling climax. JPY and gold have been screaming higher again but are starting to look particularly overextended and at risk of a big trading reversal (a JPY pullback could help the Japan 225 to rebound based on their recent opposite trading relationship).

Asia Pacific Indices

Australia 200 is holding yesterday’s low near 4,700 trading between 4,740 and 4,790. The recent low was not confirmed by the RSI creating a bullish positive divergence that indicates slowing downward momentum. Next resistance possible near 4,830 then 4,860 on a bounce.

Japan 225 remains under pressure, diving to test the 15,000 round number from 15,530 with initial resistance falling toward 15,140. RSI getting oversold again so a trading bounce possible if JPY stops climbing.

Hong Kong 50 broke down to a new yesterday gapping through 19,000 and 18,600 before regaining its footing in the 18,070 to 18,210 area above the 18,000 round number. A positive RSI divergence suggests downward momentum starting to weaken.

India 50 has fallen off the table again, breaking 7,220 and driving down through 7,055 a Fibonacci level on its way toward the 6,945 to 7,000 area. RSI getting oversold again so a trading bounce possible at some point. Next downside support near 6,865.


North American and European Indices

US 30 has continued to decline after failing to hold 16,000 yesterday, taking out 15,800 and dropping into the 15,515 to 15,700 area where it appears to have found some support above 15,500. If that fails, however, the next prior low that could be tested appears near 15,450 then 15,310.

US NDAQ 100 completed a bear trap washout breaking below 3,900 bouncing off 3,865 and rebounding into the 3,920 to 3,960 zone with next resistance near 4,000. An oversold RSI and positive divergence suggest downward pressure may be peaking.

US SPX 500 has dropped into the 1,805 to 1,825 area where it is retesting its January low. Oversold RSI and a positive divergence suggest downward momentum may be nearing its limits. Next potential round number support should it keep falling possible near 1,800 then 1,750.

Germany 30 failed to hold 9,000 and has been pounded down again, diving toward 8,700 before bouncing into the 8,770 to 8,870 zone where it appears to have found some support with some initial resistance near 8,830. RSI oversold but confirming downward momentum intact so far.

UK 100 is breaking down today, taking out 5,600 where a double bottom failed and retesting it as new resistance to confirm. It has found some support near 5,500 for now but has weakened recently falling into the 5,520 to 5,560 area. A positive RSI divergence suggests downward momentum starting to weaken.


Gold has exploded upward for a $50 gain building on yesterday’s breakout over $1,200 and soaring from near $1,205 toward $1,260 before levelling off near $1,250 with correction support near $1,240 then $1,225. With the price going parabolic and the RSI extremely overbought there’s significant risk of a snap reversal.

Crude Oil WTI is breaking down today, taking out $26.60 to signal the start of a new downleg. The price has fallen into the $25.75 to $26.50 area with next potential support near $25.00. A positive RSI divergence, however, suggests downward pressure starting to fade with momentum no longer confirming the price action. Retaking $26.60 would complete a bear trap bottom and signal an upturn.


US Dollar Index fell toward 95.40 but has bounced back toward 95.80. A doji candle suggests bulls and bears balanced while an oversold RSI suggests potential for a trading bounce.

EURUSD is breaking out today, clearing $1.1305 a Fibonacci level that has become new support with resistance emerging near $1.1350 then $1.1375. RSI confirming upward momentum but getting overbought so a correction possible with support near $1.1280 then $1.1255.

NZDUSD is trading near $0.6690 in a $0.6560 to $0.6730 range near its 50 and 200-day averages. RSI holding 50 indicates upward momentum continues to build through this consolidation phase with next resistance near $0.6870 on a breakout.

AUDUSD is holding steady near $0.7100 in a $0.7075 to $0.7110 range. RSI sitting on 50 confirms sideways momentum as the pair trades near the middle of a $0.6900 to $0.7300 channel.

USDCNH is consolidating recent losses near 6.5325 a 38% Fibonacci retracement of its recent uptrend having falling from its 50-day average near 6.5665. RSI falling away from 50 indicates increasing downward momentum with next support near 6.5000.

USDJPY plunged down to 111.00 but a floor appears to be emerging there with 3 successful tests in the last few hours. The pair bounced up toward 113.25 briefly and stabilized near 112.20 with support moving up toward 111.80. The recent move through 112.30 and on toward 112.60 suggests another  upleg may be starting.  A positive RSI divergence suggests downward pressure may be relenting.

EURJPY is retesting 126.15 which could end in a double bottom or a breakdown. So far support has been holding but RSI suggests downward momentum still increasing. The pair has bounced up into the 126.90 to 127.40 area with next resistance near 127.90 but if it turns down again, 125.00 could be tested.

CADJPY dipped below 80.00 briefly and has bounced back up toward 80.90 in what looks like a bear trap washout that could also serve as a double bottom retest of 79.10 support. A positive RSI divergence also emerging. Next bounce resistance near 81.50.

USDSGD continues to decline, breaking down below its 200-day average near $1.3915 and testing $1.3890 with potential support near $1.3750.

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