Friday’s big selloff turned out to be short-lived with a number of indices staging bear traps, while RSI indicators bouncing off 30 suggest some of the recent pressure may be washed out. That being said, there’s still a lot of work to be done to call off recent breakdowns and undo recent damage. It remains to be see if today’s action is a bear market bounce or the start of a more lasting rally.
Asia Pacific Indices
Australia 200 found support near 5,200 and has started to bounce back, rallying into the 5,250 to 5,280 area with a deeply oversold RSI suggesting the potential for more gains in the short term. Next resistance possible near 5,300 then 5,330 a Fibonacci level.
Japan 225 is bouncing around between its 50-day average near 16,525 and its 200-day average near 16,800 recently trading near 16,675 a Fibonacci level. RSI holding 50 indicates underlying upward momentum remains intact.
Hong Kong 50 followed a shooting star Friday with a breakaway gap downward falling from near 24,000 down under trend support near 23,630 that may become resistance toward 23,300 before bouncing back toward 23,500. RSI falling under 70 from overbought indicates a correction underway that could be volatile.
North American and European Indices
US 30 completed a big bullish bear trap reversal Monday breaking below 18,000 but finding support near 17,895 and then rallying back up above 18,300 with next potential resistance near 18,360 then its 50-day average near 18,410. RSI bouncing off 30 suggests downward momentum starting to ease a bit.
US NDAQ 100 saw the bulls stage a big counterattack Monday up off 4,625 back up through its 50-day average near 4,710 and on toward 4,760 but it needs to get back up closer to 4,800 to call off its recent breakdown.
US SPX 500 staged a big bounce Monday up off support in the 2,100 to 2,110 area where the 23% Fibonacci retracement level held for not. RSI touched oversold levels and has bounced indicating downward pressure may be washed out for now. Initial resistance possible at the 50-day average near 2,165 then 2,195.
UK 100 is sending mixed signals. A bounce up from near 6,650 toward 6,750 looks encouraging but was unable to regain the 50-day average it needs to clear to call off the recent breakdown. RSI still under 50 suggests momentum still weak.
Germany 30 has stabilized in the 10,330 to 10,400 area after an initial plunge was contained by the 50-day average. It has bounced back up toward 10,500 which it needs to retake to call off recent weakness.
Gold has stabilized between $1,324 and $1,330 but a low of damage was done Friday when the 50-day average near $1,340 was confirmed as resistance. Next support possible at a Fibonacci cluster just below $1,300. RSI back under 50 indicates momentum turning downward.
Crude Oil WTI was knocked back early $45.00 but support held at the 50-day average near $44.40 and the price not only regained $45.00 it quickly bounced back toward $46.30 with next resistance possible near $47.40. RSI holding 50 indicates underlying uptrend intact.
US Dollar Index is holding steady near 95.25 confirming last week’s breakout over 95.00 but trading below its 50-day average and channel resistance in the 95.80 to 96.00 area. RSI stuck below 50 indicates the recent upswing as more of a trading bounce than an upturn in trend.
EURUSD continues to bounce around between $1.1200 and $1.1300 with RSI bouncing around 50 confirming sideways momentum.
GBPUSD has started to rebound, establishing support at a higher low near $1.3230 and rallying toward $1.33.40 regaining a Fibonacci level near $1.3315. RSI holding 50 keeps its underlying uptrend intact. Initial resistance possible near $1.3390 then $1.3475.
NZDUSD remains in an uptrend, confirming accumulation with a bounce off higher support near $0.7300 toward $0.7350 with next potential resistance on trend near $0.7410 then $0.7485. RSI holding 50 confirms underlying uptrend intact.
AUDUSD dipped under $0.7500 then bounced off of $0.7490 in a classic bear trap bounce toward $0.7560 but it needs to retake its 50-day average near $0.7585 to confirm this as more than a dead cat bounce.
USDSGD ran into resistance at a lower high near $1.3625 and has been knocked back down toward $1.3550 with key support in place near $1.3500 where a round number and the 50-day average converge. Overall the pair continues to trend sideways in a wide $1.3340 to $1.3650 trading range.
USDJPY has resumed its primary downtrend after running into resistance at a lower high near 102.50 and dropping back toward 101.70 with next potential support near 101.00 then 100.00. RSI back under 50 suggests momentum turning downward.
GBPJPY continues to consolidate initial rebound gains above its 50-day average near 135.00 with initial resistance near 136.00 the 50-day average and then 137.16. RSI nearing 50 indicates upward momentum slowing for the moment.
EURJPY continues to base build trading above 113.80 support near its 50-day average but below 115.00 where it recently slipped under a 23% Fibonacci retracement level. RSI slipping under 50 suggests neutral to slightly downward momentum.
CADJPY has turned downward within its 77.00 to 80.00 trading range, breaking under its 50-day average near 78.80 and falling toward 77.80. RSI under 50 and falling confirms downward pressure increasing.
USDCAD rallied into the $1.3100 to $1.3120 area then was knocked back toward $1.3040 forming a shooting star candle that suggests the recent rebound may be ending. It would needs to fall back under $1.3000 where a round number 50-day average and Fibonacci level all converge to call off the recent upswing.