The year is off to a volatile start that saw a number of markets stage bearish reversals by rallying early in then turning sharply downward including US indices and WTI crude oil. Australian stocks and AUD remain positive for now while JPY is showing signs of bottoming out against USD and perhaps GBP plus EUR as well.
Asia Pacific Indices
Australia 200 is breaking out today, driving up through 5,700 and rallying into the 5,720 to 5,750 zone with next potential resistance near 5,800 then 6,050 based on measured moves along with the 6,000 round number.
Japan 225 continues to rebound following a successful test of 19,000 support climbing into the 19,180 to 19,260 zone with next potential resistance near 19,480 then 19,640. RSI holding 50 confirms recent correction over and underlying uptrend intact.
Hong Kong 50 has regained 22,000 to confirm an upswing underway with support moving up from its 200-day average near 21,850 toward 22,100. Upside resistance appears near 22,180 then 22,285 and 22,590 the 50-day average.
North American and European Indices
US 30 tried to rebound out of last week’s dip down toward 19,730, climbing toward 19,940 before getting pounded back down toward 19,890 and nearly completing a round trip. The index remains below 20,000 and the RSI remains below 70 indicating the index remains in consolidation mode overall with a downward correction still possible. Next support near 19,715 then 19,635.
US SPX 500 found support near 2,230 with more possible near 2,220 a Fibonacci level. The index has rebound up toward 2,245 with initial resistance near 2,262 then 2,266 then 2,277.
US NDAQ 100 traded up toward 4,930 before slumping back into the 4,880 to 4,900 area. It continues to attract support above its 50-day average near 4,840 but also continues to struggle with the 5,000 round number as initial resistance falls toward 4,935. RSI holding 50 indicates underlying uptrend remains intact.
UK 100 is breaking out today! The index has cleared 7,110 rallying to test 7,210 before slipping back with support rising toward 7,160. RSI breakout from a downtrend signals upward momentum increasing. Next potential resistance near 7,325 then 7,500 based on measured moves.
Germany 30 broke out over 10,500 to start the week and touched a new high on trend near 10,650 earlier today but has since dropped back into the 11,570 to 11,620 range for consolidation. RSI is really overbought but still confirming uptrend so far.
Gold is still struggling to build a base in the $1,120 to $1,170 range. A rally last week ran out of gas near $1,164 and the metal price slumped back toward $1,146 before retaking $1,150 and completing a round trip. Support moves up toward $1,158.
Crude Oil WTI is coming off a big bearish reversal that saw it rally to an 18-month high near $54.50 then get smashed back under $53.70 and on into the $51.60 to $52.20 area with next potential support near the $50.00 round number. RSI breaking uptrend support signals momentum turning downward.
US Dollar Index remains under accumulation, digesting recent gains at a higher level trading between 102.00 and 103.50, recently testing the top with support moving up toward 102.90.
EURUSD successfully retested $1.0360 support to complete a quadruple bottom then rallied into the $1.0400 to $1.0430 zone. RSI rising toward 50 indicates downward pressure easing with initial rebound resistance near $1.0465 then $1.0500. On a breakdown, a measured $1.0220 could be tested.
GBPUSD has stabilized in the $1.2200 to $1.2300 range with higher lows for the pair and the RSI following a downward correction indicating that base building continues. Initial resistance on a rebound possible at the 50-day average near $1.2440.
NZDUSD remains stuck below $0.7000 sliding from near $0.6970 toward $0.6920 with next support possible near in the $0.6840 to $0.6880 area.
AUDUSD successfully tested $0.7150 support and has bounced into the $0.7220 to $0.7240 area. RSI climbing up off 30 indicates downward pressure easing and a bounce underway with next potential resistance near $0.7300.
USDSGD is showing signs of a top trading up toward $1.4540 then turning downward into the $1.4470 to $1.4500 area with next support possible near $1.4430 then $1.5365. A head and shoulders top in the RSI indicates upward momentum has likely peaked for now.
USDJPY appears to be forming a double top with the pair taking another run at 118.60 but failing to get through and sliding back into the 117.20 to 117.70 area. Meanwhile the RSI remains below 70 and in a downtrend following a negative divergence to indicate upward momentum slowing. Next support possible near 116.85.
GBPJPY is trading near 144.00 trading between 143.50 and 144.20 having settled into the middle of a 142.25 to 146.45 sideways channel between two Fibonacci levels. RSI sliding toward 50 indicates a downshift in momentum from upward to sideways.
EURJPY is sitting on 122.50 near the centre of a 121.00 to 124.15 range where it has levelled off to consolidate its late 2016 gains. RSI indicates upward momentum slowing toward sideways. Initial support in place near 122.00.
USDCAD remains in an uptrend with the pair holding its 50-day average near $1.3400 and the RSI holding 50 to keep underlying upward momentum intact. Initial bounce resistance in place near $1 3460 then $1.3500 with next support on a downturn near $1.3300.
CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.