Chart Signals: Correction day sees stocks rebound while USD retreats

We’ve seen a number of reversals and trading corrections today unwinding some of the big moves of recent days. Major indices started the day under pressure then rebounded while an overdue correction in USD has enabled other currencies to rebound a bit.

We’ve seen a number of reversals and trading corrections today unwinding some of the big moves of recent days. Major indices started the day under pressure then rebounded while an overdue correction in USD has enabled other currencies to rebound a bit. 

 

Asia Pacific Indices

Australia 200 bounced off 5,400 support toward 5,450 regaining its 50-day average but it continues to roll over and really needs to regain 5,500 to call off a recent downtrend. RSI also at a critical point testing 50 which could confirm a downturn or signal an uptrend. Longer term a 5,200 to 5,600 trading range remains intact. 

Japan 225 continues to trade sideways in a range between 16,675 Fibonacci support and 17,000 round number resistance. RSI bouncing between 40 and 60 confirms sideways momentum, with the index recently rebounding toward 16,790  

Hong Kong 50 is sending mixed signals. The index broke 23,400 and fell under 23,000 toward 22,870 before rebounding toward 23,050 in what could be a bear trap bottom. On the other hand, falling RSI suggests downward pressure still bulding. 

North American and European Indices

US 30 is testing 18,000 a round number and channel bottom having dropped back from 18,130 toward 17,960 and then clawing it all  back. Falling RSI indicates downward pressure still increasing. Next potential support appears near 17,915 with next rebound resistance near 18,220.

US NDAQ 100 is breaking down today, taking out 4,800 and its 50-day average to signal a downturn with an increase in downward momentum confirmed with RSI back under 50 and falling. Recently retesting 4,800 after a bounce off of 4,760, next potential support appears near 4,742 then 4,700. 

US SPX 500 remains under pressure with the RSI still falling way from 50 and the index falling toward 2,140. A head and shoulders top continues to near completion with the rising neckline near 2,140 already broken and the flat neckline near 2,100 looming with also coincides with a 23% retracement of the advance made earlier this year. 

UK 100 continues to fall away from a double top breaking down below 7,000  bouncing up off 6,925 a recent breakout point back up toward a retest of 7,000 as resistance. RSI suggests upward momentum weakening with next support on a breakdown at the 50-day average near 6,850. 

Germany 30 is breaking down today, sliding under 10,500 and its 50-day average while RSI dives under 50 to confirm a downswing underway. Having dropped into the 10,350 to 10,470 zone, next potential support appears near 10,300 then 10,170. 


Commodities 

Gold continues to stabilize between $1,250 Fibonacci support and $1,262 resistance at its 200-day average. RSI oversold and indicating downward pressure easing indicates potential for a rebound with next potential resistance on a breakout near $1,270 then $1,282.  

Crude Oil WTI is trading back above $50.00 having established higher support near $49.30. Initial upside resistance appears near $50.90 and $51.40 with more support near $49.00. 


FX 

US Dollar Index peeked briefly above 98.00 and has dropped back toward 97.50 in what could be a bull trap peak or buying climax. RSI is really overbought so a correction remains possible with nextl potential support near 96.90. 

EURUSD successfully retested $1.1000 round number support bouncing up from $1.0990 toward $1.1050 in what could be a bear trap end to the recent selloff. RSI also suggests downward pressure starting to relent slightly. Initial rebound resistance possible near $1.1065  then $1.1120 with next downside support possible near $1.0950.  

GBPUSD continues to attract increased support bouncing up off a higher low near $1.2140 up from $1.2060 toward $1.2250. The pair remains deeply oversold with the potential for a rebound trading in the $1.2180 to $1.2220 area with next potential resistance near $1.2370. 


NZDUSD held $0.7000 round number support and $0.7015 Fibonacci support bouncing up toward $0.7100 from $0.7030. RSI suggests a trading bounce underway to ease an oversold RSI with next potential resistance near $0.7195 a Fibonacci level and initial support near $0.7050. 

AUDUSD held the $0.75000 round number, setting a higher low in the process, but it really needs to retake its 50-day average near $0.7600 to call off its recent downtrend especially with a retreating RSI indicating momentum turning downward. Next support in place at the 200-day average near $0.7435. 

USDSGD has dropped back from near $1.3870 resistance back toward $1.3800 in a normal correction of overbought conditions that developed in the recent rally. Next potential support near $1.3765.  

USDJPY is starting to drop back falling toward 103.50 from an overnight peak near 104.70 with initial resistance sliding toward 104.10. RSI suggest upward momentum levelling off. Next support in a pullback possible near 103.30 then 102.80 and the 50-day average near 101.90. 

GBPJPY  continues to hold above 125.00 support bouncing from near 125.90 toward 127.00 with next potential resistance near 128.60. RSI indicates oversold conditions starting to ease.

EURJPY is trading near 114.50 just  below 115.00 a Fibonacci level and the centre of a 114.00 to 116.40 trading channel. RSI testing 50 indicates upward momentum has faded back to neutral and a downturn pending. 
 
USDCAD has started to roll over again, falling back toward $1.3180 from $1.3260 with next potential support at the 200-day average then $1.3140 and the 50-day near $1.3070. RSI indicates upward momentum levelling off. 

USDMXN is sitting on 18.90 having bounced up off 18.80 and trading above its 50-day average but holding below 19.10, a 23% Fibonacci retracement level. RSI stabilizing near 40 suggests the recent selloff was a correction within a bigger uptrend that appears to be ending. Next potential resistance on a breakout near 19.20 then 19.38.