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Chart Signals: USD rally sparks currency corrections, crude oil bounces back

On the back of a better than expected nonfarm payrolls report, the previously oversold USD bounced  back strongly, putting pressure on gold and sparking corrections in EUR, GBP, CAD, AUD, NZD, JPY and other currencies. The lower Euro sparked a rebound in the export dependent Dax. Meanwhile, a drop in US drill rigs sparked a late day rally in WTI Friday, although $50.00 remains a key hurdle. . 

Asia Pacific indices

Australia 200 continues to bounce around between 5,600 and 5,800, recently trading near 5,740. RSI bouncing around in a narrow range near 50 confirms sideways momentum. 

Hong Kong 50 appears to have peaked for now. The index has levelled off between 27.400 and 27,700 finishing the week near 27,575. RSI overbought and starting to decline suggests upward momentum starting to falter and a correction possible. Next support appears near 27,105 a 23% retracement of the recent advance. 

Japan 225 is still hanging around near 20.000 and its 50-day average, trading between 19,900 and 20,180. RSI sitting on 50 confirms sideways momentum. 


North American and European Indices

US 30 is breaking out to a new high today, clearing 22,045 and advancing on 22,100, a double count from an old channel, before slipping back toward 22,070. RSI overbought but indicating continued upward momentum for now. Initial support possible near 22,000 then 21,900. 

US SPX 500 remains unable to break through 2,482 resistance, trading near 2,475 with initial support in place near 2,470 then 2,460. Sliding RSI indicates upward momentum weakening. 

US NDAQ 100 is still trading near 5,900 as it consolidates recent gains between 5,845 and 5,955. RSI drifting toward 50 indicates momentum downshifting into neutral. Next resistance in place near 6,000 with next support possible near 5,800. 

UK 100 continues to advance toward the top of a 7,290 to 7,525 trading range where a breakout would complete an ascending triangle. Support moves up toward 7,470 with the index clearing 7,500. RSI rising up off 50 confirms upward momentum increasing again. Next potential resistance near 7,600 a prior high then a measured 7,700. 

Germany 30 turned back upward Friday, retaking 12,240 a Fibonacci level and advancing on 12,300. Next potential resistance near 1,460 then the 50-day average near 12,525. RSI breaking out of a downtrend confirms downward pressure easing and a trading bounce underway.  


Gold is increasingly rolling over, falling from near $1,270 back under $1,260 Friday with next potential support near $1,250 and the 50-day average. RSI also rolling down toward 50 indicates a correction underway and a deeper downturn pending with next support possible near $1,244.  

WTI crude oil finished strong Friday with a rally up toward the top of an emerging $48.25 to $49.75 trading range. The price continues to swing back and forth between two Fibonacci levels and around its 200-day average. RSI steady well above 50 indicates underlying accumulation remains intact. 


US Dollar Index is starting to turn upward, breaking out over 93.00 to complete a base while RSI regaining 30 indicates downward pressure easing and a trading bounce underway. The index has rallied to test a downtrend line near 93.60. Next potential tests on a breakout possible near 94.00 then 95.00. 

EURUSD turned downward Friday, falling from near $1.900 down through $1.1800 and on toward $1.1775. RSI breaking under 70 confirms a correction starting with next potential support near $1.1705 a 23% retracement of the recent advance, then $1.1645/ 

GBPUSD retested $1.3150 ad Fibonacci resistance and confirmed the recent breakdown then turned sharply downward again. The pair dropped back toward $1.3040 with next potential support near the $1.3000 round number then $1.2970 a Fibonacci level. RSI testing 50 where a break would signal a downturn in momentum. 


NZDUSD is still showing signs of topping out, forming a small head and shoulders between $0.755 and $0.7380 a 23% retracement of the previous advance. RSI falling toward 50 indicates upward momentum fading and a downturn pending. Next potential support on a breakdown near $0.7325. 

AUDUSD is still rolling over. Unable to hold above $0.8000, the pair has dropping toward $0.7930 and tested $0.7900. Next support after that possible near $0.7880 then $0.7820 a previous breakout point. RSI falling toward 50 indicates upward momentum fading and a correction deepening. 

USDSGD continues to base build between $1.3540 and $1.3630 finishing Friday near $1.3600. RSI climbing toward 50 signals downward pressure weakening. 

USDJPY has bounced up off of 110.00, rallying toward 111.00 before settling back toward 110.60 a Fibonacci level. RSI stabilizing near 40 suggests a downward pressure easing and a trading bounce possible with next potential resistance near 111.45 and the 50-day average.  

GBPJPY has dropped back under 145.00 and is testing its 50-day average near 144.00. A breakdown would complete a descending triangle that has been forming with next support near 143.30 a 38% retracement of its previous uptrend, then its 200-day average near 141.75. RSI  back under 50 signals momentum turning downward. 

EURJPY is sending mixed signals. The pair remains above 130.00 and in an uptrend of higher lows. The pair was unable to hold a breakout over 131.00, however, while a negative RSI divergence suggests upward momentum slowing and a correction possible. 

USDCAD broke out over $1.2600 Friday, completing a base and signalling an upturn. RSI advancing on 50 indicates upward confirmation pending. The pair cleared $1.2640 initial Fibonacci resistance with its next potentially big test near $1.2740 a 23% retracement of the previous downtrend. 


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