Chart Signals: Trading bounces underway for major indices while crude oil breaks out
Many markets had become extremely oversold by the middle of last week but in the last two trading days, the pendulum has started to swing back the other way, with crude oil leading the charge and indices advancing while defensive plays like gold and JPY give back recent gains. The key question now is whether this is a dead cat bounce or the start of a sustainable advance.
Asia Pacific indices
Australia 200 is challenging 5,000 on the index and 50 on the RSI where breakout would signal the start of a new uptrend with next resistance possible near 5,045. Support rises toward 4,960.
Hong Kong 50 is starting to turn upward again, regaining 19,000 and driving on into the 19,300 to 19,400 area with next potential resistance near 19,485 then 20,030 the 23% and 38% retracements of the last month’s decline. RSI confirms a trading bounce underway.
India 50 appears to be stating to recover having established a footing near 7,300 the index has rallied up into the 7,390 to 7,430 area with next potential resistance near 7,50-7,520 near a round number and Fibonacci test. RSI also suggests downward momentum starting to weaken.
Japan 225 is staging a big upturn, staging a big rally up from 16,500 through 17,000 and on into the 17,180 to 17,280 zone, a day after a doji candle indicated bulls had pulled even with the bears. RSI driving up off 30 indicates momentum starting to turn upward as the bears cede control. .
North American and European Indices
US 30 has rallied back up above 16,000 into a range between there and 16,120 up from 15,835. Initial support moves up to the 16,030 Fibonacci level with next potential resistance near 16,290. RSI lifting up off 30 signals a trading bounce underway.
US NDAQ 100 is breaking out to the upside, clearing 4,195 a Fibonacci level to confirm the start of a new upswing and rallying into the 4,240 to 4,260 zone with next potential resistance near 4,310. RSI confirms downward pressure easing.
US SPX 500 regained 1,900 which it needed to clear to confirm the start of a new uptrend with next resistance after that near 1,940 then 1,975 both Fibonacci levels. Support rises toward 1,892. RSI indicates momentum starting to turn back upward.
Germany 30 is breaking out of downtrends in both the index and the RSI today, confirming the start of a new upswing as it drives up off of 9,550 into the 9,790 to 9,830 area with next potential resistance near 9,890 a Fibonacci level then the 10,000 round number and more support near 9,750.
UK 100 has come under renewed accumulation steadily advancing from 5,765 on toward 5,940 with initial support rising toward 5,880 and next resistance possible at the 6,000 round number. RSI nearing 50 indicates momentum upturn confirmation pending
Gold has drifted back under $1,100 but has been finding support at a higher level near $1,095, keeping its cup with handle base still forming. RSI above 50 and rising confirms upward momentum still increasing.
Crude Oil WTI has breaking out of a downtrend in a big way, blasting through $30.00 and driving on toward the $30.80 to $31.20 zone with next potential upside resistance near $31.80. RSI coming out of oversold territory and advancing on 50 indicates a strong trading bounce underway.
US Dollar Index is quietly working its way toward the top of its 98.00 to 99.75 trading range trading near 99.40 with more resistance possible at the 100.00 big round number. RSI rising off 50 confirms upward momentum picking up steam. .
EURUSD is testing the bottom of its $1.0800 to $1.1000 trading channel and a possible retest of $1.0790 Fibonacci support with its next potential test near $1.0700. RSI rolling back under 50 suggests momentum turning downward. Resistance falls toward the 50-day average near $1.0830.
NZDUSD encountered some resistance near $0.6550 and has dipped back under $0.6500 toward $0.6480 but at the same time support has moved up toward $0.6465 from $0.6400 indicating base building underway.
AUDUSD is on the rebound, breaking through $0.7000 and testing it as new round number support with resistance near $0.7050 then the $0.7080 to $0.7100 area. RSI indicates downward momentum fading and confirmation an upturn pending.
USDCNH continues to level off near 6.6090 a 23% retracement of the uptrend from August. RSI holding 50 indicates underlying uptrend intact but for now it’s consolidating between 6.5800 and 6.6230.
USDJPY continues its trading re bound, advancing from a higher low near 117.50 on toward 118.80 with next potential resistance near 119.20 and 119.65. RSI nearing 50 to indicate momentum poised for an upturn.
EURJPY continues to consolidate in the 127.00 to 129.00 range with a positive RSI divergence an emerging uptrend suggesting downward momentum and base building underway. Recently trading in the 127.90 to 128.30 zone.
CADJPY continues its big bounce up out of a bear trap and retest of 80.00 support driving up from 82.00 toward 84.00 with next upside resistance near the 85.00 round number. RSI had been really oversold, now nearing 50 where a breakout would confirm the start of a new uptrend.
USDSGD is starting to break down and complete a rounded top breaking $1.4330 which may become resistance and rallying into the $1.4260 to $1.4290 area with next potential support at the 50-day average near $1.4175.