Chart Signals: Resources retreat while indices rebound
14:45, 14 August 2017 · By Colin Cieszynski
Stock markets have been on the rebound Monday, with the Germany 30 regaining 12,000 and the US 30 retesting 22,000. Gold and JPY have come under pressure as capital moves back out into risk markets from defensive havens. Crude oil is under pressure with yesterday’s soft China data impacting commodities. Resource currencies like CAD, AUD and NZD continue to retreat, dragged down by energy and metal prices.
Asia Pacific Indices
Australia 200 continues to bounce around between 5,655 and 5,800 recently popping back up above its 50-day average toward 5,760. RSI steady near 50 confirms a sideways trend.
Japan 225 is on the rebound, continuing the climb up off a successful test of its 200-day average by regaining 18,485 a Fibonacci level and advancing on 19,615. Next potential resistance appears near 19,.645 then 19,795. RSI indicates a trading bounce underway, easing oversold conditions.
Hong Kong 50 has filled in a gap left last week as it bounces back from a correction. Support moves up toward 27,105 from 27,000 with the index advancing on 27,360. RSI held 50 to indicate the underlying uptrend continues. Next resistance possible near 27,555.
North American and European Indices
US 30 has regained 21,900 and is advancing on a test of 22,000 resistance. If the index can retake that level, it could then retest its previous high near 22,175. Failure, however, would indicate a top forming with next support near 21,820.
US SPX 500 held trend uptrend support near 2,435 and has regained its 50-day average in a bounce back up toward 2,465. Upside resistance appears near 2,482.
US NDAQ 100 continues to rebound up off a higher low near 5,760, regaining its 50-day average near 5,800 and advancing on 5,905. RSI regaining 50 signals an upswing underway. Next resistance possible near 5,940 then 6,000.
UK 100 held 7,290 channel support and has started to rebound, rallying back up toward 7,360. RSI bouncing off 40 confirms the recent downswing may be over. Initial resistance appears near 7,400 the midpoint of the current 7,300 to 7,400 trading range.
Germany 30 continues to bounce up off its 200-day average, regaining 12,000 and advancing on 12,180. RSI indicates downward pressure easing but the index really needs to retake 12,240 resistance to call off its recent downtrend.
Gold appears to be rolling over, falling toward $1,282 having peaked just short of current channel resistance near $1,296. An overbought RSI indicates gold may be due for a correction. Initial support tests possible near $1,270 then $1,260.
WTI crude oil is increasingly turning downward. The price dropped from a lower high and its 200-day average near $49.20, taking out a channel bottom near $48.25 on its way down toward $47.75. RSI slipping under 50 confirms the downturn in momentum. Next potential support near $47.45 then $46.80.
US Dollar Index continues to base build, holding above 93.00 and bouncing toward 93.35. RSI advancing on 50 indicates downward pressure weakening. Initial resistance possible near 93.45, 93.75 and 94.00.
EURUSD is still in consolidation mode, trading between $1.1700 and $1.1900. A lower high in the pair near $1.1850 along with a lower high in the RSI and a drop back under $1.1800 toward $1.1775 suggest the pair could be peaking.
GBPUSD is still hanging around $1.3000, trading between $1.2970 Fibonacci support and $1.3030. RSI slipping under 50 indicates momentum turning downward with next potential support at the 50-day average near $1.2935.
NZDUSD remains under pressure, with resistance falling toward $0.7320 and the pair falling toward $0.7275 a Fibonacci level with next support after that possible near $0.7250. RSI under 50 and falling indicates increasing downward momentum.
AUDUSD is still sliding downward, with resistance falling toward $0.7880 from $0.7910 and the pair trading near $0.7850 with next support possible near $0.7820 then $0.7775. RSI dipping under 50 indicates momentum turning downward.
USDSGD continues to steadily recovery, with $1.3600 emerging as higher support. RSI advancing on 50 indicates downward pressure easing and an upturn pending. Next potential resistance near $1.3655 then $1.2710.
USDJPY is starting to turn back upward and may be on day 3 of a 3 day Morning Star candle pattern. Friday the pair dipped under 109.00 and rebounded, a classic bear trap bottom and a hammer. The pair would need to clear 110.00 to signal an upturn with next resistance near 110.60.
GBPJPY appears to be stabilizing near 142.00 near a Fibonacci level and its 200-day average with a morning star forming to indicate the recent selloff has ended. RSI also suggests downward pressure starting to fade. Initial resistance possible near 142.75 then 143.30.
EURJPY is bouncing up from a successful test of its 50-day average near 128.50, trading near 129.25. The pair needs to regain 130.00 and the RSI needs to regain 50 to confirm an upturn but for now, downward pressure appears to be fading.
USDCAD is sitting around $1.2700, between $1.2670 and $1.7220 having encountered resistance near $1.2750, and completed a common 23% retracement of its previous downtrend. RSI faltering near 50 suggests this may have been a correction within an ongoing downtrend.