Chart Signals: Snap corrections underway ease overextended conditions

By the end of last week a number of markets had become overextended technically and due for a correction which he have seen in spades today sending risk markets particularly stocks and indices higher and sending defensive havens like gold and JPY sharply lower. RSI indicators have not been crossing the 50 line, however, and market moves have been contained by averages, patterns and Fibonacci levels suggesting that so far these have been corrections rather than major trend changes. The potential for big swings in both directions over the next 24-48 hour difference remains high.

By the end of last week a number of markets had become overextended technically and due for a correction which he have seen in spades today sending risk markets particularly stocks and indices higher and sending defensive havens like gold and JPY sharply lower. RSI indicators have not been crossing the 50 line, however, and market moves have been contained by averages, patterns and Fibonacci levels suggesting that so far these have been corrections rather than major trend changes. The potential for big swings in both directions over the next 24-48 hour difference remains high. 


Asia Pacific Indices

Australia 200 is rallying up out of a successful retest of 5,150 support, unwinding an oversold RSI with a big bounce up toward 5,270 and a test of its 200-day average as support rises toward 5,240. Next potential resistance near 5,375 and the 50-day average.  

Japan 225 has popped up off 16,815 Fibonacci and 50-day average support through 17,000 and on toward 17,260 with support rising toward 17,200. RSI back above 50 confirms a bounce underway with next potential resistance near 17.425 a Fibonacci level. 

Hong Kong 50 gapped up off 22,500 toward 22,650 and has continued to climb, advancing on the 23,000 round number with next potential resistance after that near 23,110. RSI indicates downward pressure easing and a bounce underway but it needs to retake 50 to confirm. 


North American and European Indices

US 30 gapped up from near 17,900 through 18,000 and on toward 18,070 to start the week and has kept climbing toward 18,240 and the 50-day average with support rising toward 18,200 and next resistance near 18,275. RSI, retaking 50 confirms an upturn underway.  

US NDAQ 100 is starting to ease oversold conditions bouncing back up from 4,650 through 4,700 regaining 4,740 and driving on toward 4,775. Next potential resistance in the 4,800 to 4,820 area near its 50-day average
US SPX 500 staged a nice bounce off its 200-day average near 2,085 popping back up toward 2,130 with support rising toward 2,110 but it remains way short of its 50-day average near 2,150 and in a downtrend of lower highs, while RSI remains below 50 suggesting this may be just a trading bounce. 

UK 100 has started the week with a rebound gapping up from 6,660 through 6,710 then carrying on toward 6,800 area where it has levelled off for now. RSI back above 30 indicates oversold conditions starting to unwind.  

Germany 30 rallied up from earn 10,200 through 10,335, which may become support, and carrying on toward 10,460. It remains below 10,500 and 50 on the RSI both of which it needs to clear to make this a serious upswing and not just a dead cat bounce. 


Commodities 

Gold has dropped back under $1,300 and its 50-day average but is trading near $1,282 a Fibonacci level  and above its 200-day average near $1,276 and 50 on its RSI indicating this as a trading correction within an uptrend so far.  

Crude Oil WTI has successfully tested its 200-day average and previous channel lows in the $43.00 to $43.50 area plus a hammer reversal candle and now has started rebound toward $44.50. It still needs to retake $45.00 to signal the start of an upturn with next potential resistance near $45.80 then $47.00 and the 50-day average.  


FX 

US Dollar Index held 97.00 support and has started to bounce back a bit, trading up toward 97.80. RSI back above 50 confirms an upswing. The index still faces resistance near 98.10, 98.50 and 99.00. 


EURUSD has dropped back under its 50-day average near $1.1115 and the $1.1100 level falling toward $1.1035 but the pair holding $1.1000 and the RSI holding 50 suggest this may be a trading correction within a larger upswing. 

GBPUSD has slipped back under $1.3500 toward $1.2400 in a trading correction. The pair holding well above $1.2280 where it broke out of a triangle and 50 on the RSI indicates underlying accumulation remains intact through the current retrenchment.  


NZDUSD has paused in the $0.7300 to $0.7360 zone consolidating recent gains. RSI also suggests the current upswing still levelling off but underlying upward momentum intact for now. Next resistance near $0.7380 and $0.7410 with next support at the 50-day average near $0.7240. 

AUDUSD is trading back above $0.7700 advancing on $0.7730 where a breakout would complete a big bullish ascending triangle and signal the start of a new upleg that could challenge $0.7840 a prior high. Similarly RSI approaching 60 where a breakout would confirm increasing upward momentum but a failure would suggest continued consolidation. 

USDSGD held 50 on the RSI keeping its underlying uptrend intact for now and has rebounded toward $1.3900 as it bounces around in a $1.3820 to $1.3970 channel. 

USDJPY has bounced up off its 50-day average near 103.00 up toward 104.60 but remains short of round number, channel and Fibonacci resistance in the 105.00 to 105.25 zone. RSI suggests underlying upward momentum may be reasserting itself.  

GBPJPY has paused just below 130.00 round number resistance but remains under accumulation with support rising toward 129.40 and RSI clearing 50 to signal momentum turning upward. Next potential resistance near 133.00 a 23% retracement of its previous downtrend. 

EURJPY has cleared 115.00 a round number and Fibonacci level as it continues to advance within a 112.00 to 116.00 trading range. Lower highs are forming a bullish ascending triangle while RSI holding 50 confirms momentum turning increasingly upward. Next potential resistance on a breakout near 117.00 then 118.35. 

USDCAD continues to bounce around between $1.3310 Fibonacci plus breakout point support, and $1.3460 resistance recently slipping back from $1.3410 toward $1.3360. RSI indicates upward momentum peaking and starting to roll over. 

USDMXN dove down from near 19.00 back with RSI suggesting a downturn in momentum but after the initial gap, there hasn’t been much follow through with uptrend and Fibonacci support in the 18.50-18.60 zone holding so far.  

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