There has been a sea change in currency market sentiment today with a number of markets making significant technical turns. Morning and evening stars, double bottoms, key reversals, round number failures and other developments have combined to signal big trend changes are underway. The USD has started to shake off its summer slide, pulling the rug out from under Gold, JPY, EUR, CAD, AUD and NZD.
Asia Pacific Indices
Australia 200 is testing the bottom of a 5,655 to 5,800 trading range today. Support has held so far with the index rebounding toward 5,675 but RSI falling under 50 indicates downward pressure increasing. Next potential support near 5,600 on a breakdown.
Japan 225 continues to turn back upward, regaining 19,500 and advancing on 19,580. RSI advancing on 50 indicates downward pressure fading and confirmation of an upturn pending. Next potential resistance appears near 19,600 then 19,795 a Fibonacci level.
Hong Kong 50 touched a new high near 28,110 before slumping back toward 28,050 it remains under accumulation above 28,000 but a break of that level would be technically troubling especially with a negative RSI divergence indicating slowing upward momentum. Next downside support possible near 27,855.
North American and European Indices
US 30 peeked up above 21,900 but was unable to hold it, slipping back toward 21,890. RSI holding 50 indicates underlying accumulation intact but the index appears to be moving into a 21,6650 to 21,900 trading range with additional resistance at the 22,000 round number.
US SPX 500 is turning back upward, regaining 2,455 and advancing on 2,460 with next potential resistance near 2,470 then 2,482. RSI regaining 50 indicates momentum starting to turn back upward.
US NDAQ 100 is breaking to the upside, regaining 5,900. Breakouts from downtrends in the index and the RSI indicate renewed accumulation. Upside resistance appears near 5,960 then 6,000. Support rises toward 5,900 form 5,860.
UK 100 has been unable to regain its 50-day average in a trading bounce and remains stuck in the lower half of a 7,300 to 7,500 trading range near 7,380, The RSI remains unable to regain 50 indicating distribution continues. Additional support possible in a downturn at the 200-day average near 7,270.
Germany 30 is sitting just above the 12,000 round number, on its 200-day average. The index is near the middle of Monday’s 12,140 to 11,860 trading range but a lower high and RSI still under 50 suggest this could be a brief pause within an ongoing downtrend.
Commodities
Gold continues to slump back toward a retest of its $1,300 breakout point, falling back under $1,310 toward $1,307 today after spiking up toward $1,325 on Monday. A negative RSI divergence indicates upward momentum slowing and a correction possible.
WTI crude oil remains under pressure with resistance falling toward $46.25 from the 50-day average near $47.00. The price is testing $46.00 with next potential support near $45.60 then $45.30 and $45.00. RSI falling away from 50 indicates downward momentum accelerating.
FX
US Dollar Index is turning back upward and appears close to completing a bullish Morning Star candle pattern. Climbing out of a bear trap and hammer reversal day that saw it break 92.00, fall toward 91.55 then rally, the index has moved back up toward 92.85 with next potential resistance near 93.00 then 93.40.
EURUSD appears to have peaked with a shooting star buying climax above $1.2000 evolving into a bearish Evening Star pattern. A negative RSI divergence at the peak indicates slowing upward momentum. $1.2000 has emerged as resistance with the pair plunging toward a test of $1.890. Next downside support possible after that near $1.1800.
GBPUSD is sending mixed signals. The pair found support at a higher low near $1.2880 and bounced back up over $1.2900 toward $1.2920. A $1.2785 to $1.2970 trading range between two Fibonacci levels continues to emerge below the 50-day average. On the other hand, RSI failing to retake 50 indicates downward pressure intact.
NZDUSD has taken a sharp turn south, diving from $0.7275 toward $0.7190 the top to the bottom of a Fibonacci trading range. RSI under 50 and falling indicates increasing downward pressure. Next potential support near $0.7100 another retracement test.
AUDUSD has turned decisively downward after once again failing to break through $0.8000 resistance. The pair has dropped back toward $0.7890 with next potential support at its 50-day average and a recent low near $0.7820.
USDSGD continues to bounce up off of $1.3500 with support rising toward $1.3550 and the pair advancing on $1.3585. Next potential resistance appears near $1.3625 then the 50-day average near $1.3675.
USDJPY is breaking out today, first taking out a downtrend line near 109.70 then retaking 110.00 on its way toward 110.40. RSI regaining 50 confirms an upturn underway. Next resistance tests possible near 110.60 a Fibonacci level then 111.00.
GBPJPY has completed a rounded bottom and decisively turned back upward with the pair regaining its 200-day average near 142.40 and advancing on 142.80. RSI regaining 50 confirms the upturn in momentum. Next potential resistance near 143.30 with support rising toward 141.85 both Fibonacci tests.
EURJPY is bumping up against 131.40 resistance, unable to get past 131.75. A negative RSI divergence indicates upward momentum slowing and a correction possible, with initial support in the 130.00 to 130.20 area.
USDCAD appears to have put a double bottom in place near $1.2425, rallying up from $1.2450 through $1.2500 then $1.2600 on its way toward $1.2635. Next resistance appears at the 50-day average near $1.2710, then $1.2750 a 23% retracement of the recent downtrend.
Disclaimer: CMC Markets is an order execution-only service. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.
