Resource dollars finished last week on their back feet with AUD, NZD and CAD all rolling over as rallies failed at similar or lower highs. Gold and crude oil stalling out and dropping back hasn’t helped sentiment toward commodity currencies either. Major indices are mixed with US markets looking exhausted while Asia Pacific indices appear to be attracting some support.
This week could get off to an active start as traders react to developments related to the US health care bill. The bill was pulled late Friday as the Republicans were unable agree among themselves. It remains to be seen if they will continue to flog this dying horse or move on to tax reform. Any comments out of this weekend’s EU summit ahead of Wednesday’s Article 50 Brexit trigger may also have an influence on trading.
Asia Pacific indices
Australia 200 continues to rebound, regaining its 50-day average near 5,730 then advancing toward 5,770. It continues to form an ascending triangle of higher lows below 5,830 with initial resistance near 5,800. RSWI back above 50 confirms an upswing underway.
Hong Kong 50 is sending mixed signals. The index remains in an uptrend holding above 24,000 and 24,260 with next resistance possible near 24,480 then 24,710. On the other hand, a negative RSI divergence suggests upward momentum slowing.
Japan 225 is starting to swing upward within a sideways trend indicated by RSI bounding around between 40 and 60. The index has successfully tested 19,000 and has bounced back up toward 19,250, clearing its 50 day average. Next potential resistance near 19,480.
North American and European Indices
US 30 is bouncing around between 20,595 and 20,785 recently trading near 20,610. With the index below its recent breakdown point and the RSI under 50, this looks like a pause within a potentially bigger downswing with next potential support at the 50-day average near 20,475.
US SPX 500 is still struggling with 2,350 as former support becomes new resistance. RSI stuck under 50 also suggests distribution. Next potential support at the 50-day average near 2,330 followed by 2,310 a Fibonacci level.
US NDAQ 100 is sending mixed signals. The index remains below 5,400 where it broke a trend support line and is trading near 5,370. It appears to be moving into a sideways trend with support emerging near 5,300 and RSI holding 50.
UK 100 remains in an uptrend, having successfully tested support at 7,300 and 50 on the RSI. The index has bounced back toward 7,335 with next potential resistance near 7,400. We could be moving into a sideways consolidation range with an ascending triangle forming.
Germany 30 remains in an uptrend having established support at a higher low near 11,900, then regaining 12,000 and advancing on 12 100, calling off a bearish rising wedge. RSI holding 50 also confirms the underlying uptrend continues. A sideways range between 11,860 and 12, 175 appears to be emerging.
Gold has started to drop back as its latest rally runs out of gas. The metal price has slipped back under $1,250 toward $1,244 having peaked at a lower high near $1,254. RSI also suggests the recent upswing within a sideways trend may be getting tired. Initial support in a pullback possible near $1,242 then $1,230.
Crude Oil WTI has levelled off in the $46.40 to $48.00 range recently trading near $47.50. So far this appears to be a consolidation phase to work off an oversold RSI, but still a pause within a bigger downtrend. Next potential support near $46.00 with next potential resistance at the 200-day average near $48.40.
US Dollar Index is still stuck below 100.00 trading near 99.60 with next support possible near 99.30 then 99.00. A series of dojis suggests bulls and bears in balance at the moment.
EURUSD is still struggling with resistance at a Fibonacci cluster near $1.0830 but remains in an uptrend with support rising toward $1.0760 from $1.0720 and the pair trading near $1.0800. RSI above 50 and rising indicates increasing upward momentum.
GBPUSD is hanging around $1.2500 having encountered resistance near $1.2540 while attracting support at a higher level near $1.2470. RSI has reached the top of a 40-60 range and paused suggesting the recent upswing could be tired and in need of a rest.
NZDUSD has resumed its downtrend, falling away from a lower high near $0.7100 toward $0.7030 with next potential support near $0.7000 then $0.6970 then $0.6890. RSI still stuck below 50 and turning down indicates continuing distribution.
AUDUSD is testing its 50-day average near $0.7620 and is at a potentially significant technical turning point. If it can hold and rebound it would set a higher low on trend and continue to form an ascending triangle below $0.7750. A failure would signal the uptrend has become a sideways trend and that a downswing is underway with next potential support at the 200-day average near $0.7540 then the $0.7500 round number.
USDSGD is still holding steady above $1.3945 Fibonacci support and sitting just below $1.4000, remaining in a downtrend below $1.4030. Next potential resistance near $1.4080 with next downside support at the 200-day average near $1.3910.
USDJPY has paused near 111.25 to digest recent declines with a consolidation phase within a bigger downtrend potentially emerging between 111.60 it recent breakdown point, and 110.60 with next potential support at the 110.00 round number.
GBPJPY is trading near 139.00 but remains in a downtrend of lower highs in a falling channel bounded by its 50 and 200-day averages. RSI steady under 50 confirms downward momentum intact. Next potential support near 138.10 then 137.35 with initial resistance possible near 139.50.
EURJPY appears to be starting a new upswing, having established a higher low for the pair and 119.00 a Fibonacci level and 40 on the RSI. The pair has regained 120.00 to trade near 120.20 but the RSI needs to regain 50 to confirm the upswing. Next potential resistance near 121.00 the 50-day average.
USDCAD is trading near $1.3375 having successfully tested support at $1.3300 the midpoint of a broad $1.3000 to $1.3600 sideways range. RSI holding 50 and moving averages turning upward confirm underlying upswing intact with initial resistance near $1.3400.