Chart Signals: Indices rolling over while GBP bottoms out and JPY faces a big test

Major indices around the world continue to roll over suggesting that a seasonal correction may be starting as we enter the worst time of the year for stocks.

Major indices around the world continue to roll over suggesting that a seasonal correction may be starting as we enter the worst time of the year for stocks. On the flip side, it appears the worst may be over for GBP with double bottoms against USD and JPY suggest a base forming. Meanwhile, USDJPY has a big technical test underway at 100.00 where a break could attract the attention and intervention (verbal or otherwise) of central bankers.

Asia Pacific Indices

Australia 200 continues to attract support above 5,485 a Fibonacci level, and the 5,500 round number trading near 5,540 with resistance in place near 5,570 then 5,615. RSI drifting toward 50 indicates momentum fading back to neutral.

Japan 225 held above 16,500 in a correction, confirming a sideways consolidation channel emerging between there and 17,000 with the index recently trading near 16,650. RSI bouncing between 40 and 60 confirms sideways trend.

Hong Kong 50 continues to roll over, falling away from 23,000 toward 22,850 then on toward 22,.760. RSI back under 70 confirms upward momentum fading and a trading correction underway with nest potential support near 22,500 then 22,325.

North American and European Indices

US 30 has drifted back toward the 18,500 to 18,550 area as it increasingly looks like a near term double top has formed just below 18,700. RSI falling toward 50 indicates upward momentum fading. Next potential support near 18,360 then 18,250.

US NDAQ 100 is back to hanging around 4,800 while working off an overbought RSI having dropped back from 4,840. Next potential support in a correction appears near 4,765 then 4,740.

US SPX 500 is bouncing around 2,175 and 2,195 consolidating recent gains. RSI indicates upward momentum fading and the trend downshifting into neutral. More support possible near 2,155.

UK 100 has slipped back under 6,900 while RSI has slipped back under 70 indicating a correction of overbought conditions appears to be underway. Next support possible in the 6,780 to 6,810 area between previous support and resistance points.

Germany 30 successfully retested support at 10,500 a previous breakout point, ending a trading correction for now. The index has bounced back into the 10,570 to 10,610 area with next resistance possible near 10,750 then 10,880 as a sideways trend emerges.

Commodities

Gold is holding steady in the $1,336 to $1,352 range, recently trading near $1,345 with a higher low in the price and RSI holding 50 indicating that a bullish ascending triangle continues to form below $1,375 with initial resistance near $1,355.

Crude Oil WTI has paused in the $45.90 to $46.80 zone to consolidate recent gains including its breakouts this week over $45.00 and its 50-day average. RSI starting to level off indicates a pause within an ongoing uptrend with initial resistance tests possible near $47.00 then $47.95.

FX

US Dollar Index bounced off of 94.20 in what looked like a hammer reversal but the rally has been capped by lower resistance at the 95.00 round number. A doji candle suggests bulls and bears in balance and a 94.00 to 96.00 trading range probably emerging.

EURUSD has paused just below $1.1300 to consolidate recent gains holding well above its $1.1225 breakout point with RSI confirming momentum levelling off.

GBPUSD is holding above $1.3000 building support at a higher low and round number to indicate a change in sentiment. A double bottom now appears to be in place near $1.2800. Initial resistance possible near $1.3085 then $1.3200.

NZDUSD peeked above $0.7300 and once again failed to break through, dropping back toward $0.7230 but its trend of higher lows remains intact above $0.7160 and an ascending triangle continues to form.

AUDUSD continues to struggle with resistance in the $0.7700 to $0.7750 area dropping back toward $0.7640 but holding $0.7600 initial support with more possible near $0.7535 the 50-day average. RSI falling back toward 50 indicates upward momentum slowing.

USDSGD continues to form a base between $1.3340 and the 50-day average near $1.3500 building what looks like a triple bottom base. RSI holding 40 also suggests a recovery trend may be starting. 

USDJPY continues to attract support above 100.00 suggesting yesterday’s dip down may have been a bear trap washout. RSI flat near 40 suggests downward pressure may have peaked and a base forming with initial resistance near 101.00 then 102.00. Downside tests on a breakdown appear possible near 99.60 then 98.80. 

GBPJPY continues to turn upward indicating yesterday’s bear trap reversal near 130.00 and a hammer candle may have formed a double bottom for the pair. Recently trading near 131.10, initial resistance may appear near 132.40.

EURJPY is holding steady near 113.00 and appears to be base building with a higher floor emerging and RSI indicating downward pressure levelling off. Initial resistance possible near 114.00 then the 50-day average near 115.00.

CADJPY is bouncing around between 775.0 and 79.00 with RSI stuck under 50. Mixed signals make it unclear if a base is forming or if this is another pause within an ongoing downtrend.

USDCAD has found some support near $1.2800 and has bounced a bit working off an oversold RSI. The rebound has been contained near $1.2920 so far indicating that its broader downtrend remains intact through this upward correction with the pair trading recently near $1.2860.