Here is today’s wrap and chart signals
Index Chart Signals
Australia 200 – 5315 remains key resistance. The daily chart has entered a short term downtrend with daily candles making lower lows and lower highs. This leaves Friday’s peak as a rejection of the key resistance (at least for the short term).
Last week’s low at 5152 now looks like a significant level. A break below this might indicate a deeper downward correction, perhaps back towards trend line support just below 5000. However, the RSI is drifting sideways suggesting price might also drift with potential to oscillate around the 5315 resistance.
Australia 200 CFD Daily
Click to Enlarge
US 30 - continues to stall around the 62% retracement of its previous retreat. RSI is also drifting sideways suggesting a pause in the current uptrend.
Germany 30 has lost momentum around its 50 moving day average near 10,090. RSI also indicates momentum has stalled while the market consolidates recent gains. If the current rally fails in the near future, the price action of recent months will start to look like a descending triangle formation. The August and September lows would form the base of this triangle. This will be a potentially bearish pattern signalling the possibility of a return to the triangle base or even a break below it.
Commodity Chart Signals
Gold has established a short term downtrend with daily candles now making lower lows and lower highs. This looks like an initial rejection of the 200 day moving average resistance. Last week’s peak at $1191.7 now forms resistance. The 38.2% Fibonacci retracement of the last rally cuts in around $1159. Rejection of this level could set up for a corrective bounce.
Crude Oil WTI continues to trend down with next potential support between $43.50 and $44.10. Last week’s peak at $47.45 now provides initial resistance.
FX Chart Signals
AUDUSD – remains in a short term downtrend and is now testing the support of last week’s low at .7199. At .7181, this swing down will be the same size as last week’s so a bounce off this area is possible. However, RSI is heading down with potential to break below 50 which would suggest potential for a deeper downward correction. If this happens, the 50% and 61.8% retracement levels around .714 and .708 come into play as possible targets for the current correction
EURUSD – momentum has stalled at least temporarily with yesterday’s candle trading inside Tuesday’s range. The RSI is also starting to move sideways indicating ranging behaviour. However the downtrend remains intact on the daily chart. From here it would take a break above the resistance of Tuesday’s high at 1.1387 to change this. Continued drift lower could see a move back to the 61.8% retracement around 1.127. This would also see price back into the zone between the 20 and 50 day moving averages. A bounce out of this zone could provide a buy setup