The Dow touched another new high Tuesday but more importantly, it finally got some confirmation from the S&P 500 which also finally broke out. Meanwhile, there appears to be a shift in sentiment underway in currency markets with GBP and EUR tumbling and breaking down against a resurgent USD and JPY.
Asia Pacific Indices
Australia 200 is still sending mixed signals. The index continues to form a descending triangle of lower highs below 5,800 and above 5,655, recently trading near 5,760. This suggests distribution, but a steadily rising RSI suggests accumulation.
Japan 225 continues to bounce around the 20,000 round number while the RSI slipping under 50 suggests momentum may be turning downward. Resistance drops from 20,100 toward the 50-day average near 20,040 with support possible near 19,935 then 19,900.
Hong Kong 50 is breaking out again today, clearing 27,700 and rallying up toward 27,810 then 27,930, approaching the 28,000 round number. RSI is really overbought so it wouldn’t take much to spark a correction but at the same time, it continues to confirm increasing upward momentum.
North American and European Indices
US 30 reached a new high Tuesday near 22,165 but has since dropped back toward 22,125 with next support possible near 22,080 then 22,000. RSI overbought and rolling over indicates upward momentum may be peaking and a correction possible.
US SPX 500 broke out to a new all-time high Tuesday, clearing 2,482, and rallying toward 2,491, within striking distance of the 2,500 round number before dropping back for a retest of the breakout point as support.
US NDAQ 100 is still trending sideways between 5,840 and 6,000 recently trading above 5,900 near 5,950. RSI steady near 60 suggests this is a pause to consolidate gains within a bigger uptrend.
UK 100’s latest rally appears to be running out of gas near 7,525, with resistance emerging near 7,536. RSI levelling off near 60 again indicates upward momentum may be peaking and can be seen as a sign of distribution. Initial support possible near 7,522 then 7,460.
Germany 30 once again failed to break through resistance near 12,340 and has since dropped back toward 12,260, holding above 12,240 a Fibonacci level. A 12,090 to 12,350 consolidation range may be emerging with RSI rising toward 50 indicating slowing downward momentum.
Gold continues to struggle. A rally attempt failed at a lower high near $1,265 and the price dropped back toward $1,255, with next support at its 50-day average near $1,250. RSI drifting toward 50 suggests a downturn pending with next potential support near $1,243.
WTI crude oil continues to consolidate recent gains between $48.25 and $49.75, two Fibonacci levels. Initial support appears at the 200-day average near $49.00. Additional resistance in place near $50.00 then $50.30.
US Dollar Index broke out of a downtrend Tuesday, clearing 93.40 and retesting it as new support. RSI gaining on 50 indicates downward pressure easing and an upturn pending. Next potential resistance near 94.00 with support near 93.15.
EURUSD continues to roll over, dropping back under $1.1800 toward $1.1760. RSI falling toward 50 signals a deepening correction. Next potential support near $1.1705 a Fibonacci level then $1.1620.
GBPUSD is breaking down today, taking out the $1.3000 round number and falling toward a test of its 50-day average near $1.2925 before support was reasserted near $1.2970 a Fibonacci level. RSI breaking under 50 confirms momentum turning downward so the pair remains vulnerable.
NZDUSD remains under pressure, falling away from $0.7385 resistance toward $0.7325. RSI breaking under 50 confirms momentum turning increasingly downward. Next potential support near $0.7275 a 38% retracement of its previous uptrend.
AUDUSD is still holding $0.7900 support for now but a falling RSI and lower highs indicate the pair remains vulnerable. Next potential support appears near $0.7825 a previous breakout point.
USDSGD continues its rebound up off of $1.3540, climbing up toward $1.3630 with next potential resistance near $1.3700 then the 50-day average near $1.3740. RSI climbing toward 50 indicates downward pressure fading and confirmation of an upturn pending.
USDJPY is still bouncing around 110.60 trading between 110.00 and 111.00. RSI steady near 40 suggests this may be a normal pause within an ongoing downtrend. Next support on a breakdown closer to 109.00.
GBPJPY is breaking down today, taking out its 50-day average near 144.20 and diving toward 143.30 a Fibonacci level. Next potential support after that near 141.85 where its 200-day and a Fibonacci test converge. Falling RSI confirms increasing downward momentum.
EURJPY is breaking down today below 130.00 which has caused an ascending triangle to fail and a support line become resistance. RSI falling toward 50 indicates confirmation of a downturn in momentum pending. Next potential support in the 128.60 to 129.00 area then 128.00.
USDCAD has levelled off in the $1.2650 to $1.2680 area short of $1.2740 resistance, a 23% Fibonacci retracement level. RSI stopping short of 50 indicative upward correction within a bigger downtrend may be ending. Initial support near $1.2600 in a pullback.
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.