It’s been a mixed day for trading across world markets with some contracts pausing to digest recent moves and others breaking out. Clear divergences have emerged among currencies and indices. Gold, AUD, the Hong Kong and NDAQ markets in particular have been rallying while the US 30, US SPX, Australia 200, Japan 250, GBP and crude oil have been under pressure
Asia Pacific Indices
Australia 200 may have peaked and looks like it’s starting to roll over. Monday’s drive up over 5,800 that failed looks like a bull trap top and a shooting star. Today 5,800 has re-emerged as resistance and the index has started to drift downward trading initially toward 5,780 with next potential support near 5,700 then 5,655.
Japan 225 looks like it has completed a double top near 19,700 and appears to be in a correction falling back into the 19,310 to 19,440 area with next potential support near the 19,000 round number. Lower highs in the RSI indicates upward momentum weakening and a downturn pending.
Hong Kong 50 is rallying up off its 50-day average near 22,410, climbing recently from 22,730 toward 22,810 but more importantly, it's testing the top of a four month falling channel. A break out 22,850 would signal the start of a new uptrend that could challenge the 23,000 round number initially. Rising RSI indicates upward momentum increasing and it’s not overbought so there could be room to run.
North American and European Indices
US 30 continues to roll over with an attempt to retake 19,900 failing at a lower high near 19,915 and the index slumping back toward 19,865 with next potential support near 19,790 then 19,700 channel support. RSI under 70 and falling indicates upward momentum fading and a correction deepening.
US SPX 500 recently touched a new high near 2,280 but a negative RSI divergence indicated that upward momentum has already peaked. Now the Index has started a correction falling back into the 2,265 to 2,272 area with next potential support near 2,255 then 2,235. Lower highs in the RSI suggest distribution starting.
US NDAQ 100 continues to reach new highs as it trades above 5,000 in the 5,020 to 5,040 range, The NDAQ had lagged other US indices and is playing catch-up. RSI shows rising upward momentum and isn’t overbought so there’s still room to run for now but eventually changing sentiment could catch up to this index as well.
UK 100 is highly overbought and vulnerable to a correction but so far it continues to climb with price gains confirmed by a rising RSI. The index has rallied to another new high near 7,270 with next potential near a measured 7,300. Support rises toward 7,215 from 7,165.
Germany 30 is still trending sideways between 11,445 and 11,650 digesting its December rally and working off an overbought RSI, recently trading between 11,540 and 11,610.
Gold continues to recover although the advance appears to be pausing for a rest in the $1,182 to $1,186 range above $1,172 Fibonacci cluster support and below the 50-day average near $1,190 followed by the $1,200 round number.
Crude Oil WTI is breaking down today, taking out the bottom of a $51.60 to $53.60 trading channel and diving toward $50.50 while resistance falls toward $50.80. Next potential support appears near $50.00 then $49.00 and the 50-day average. RSI breaking under 50 confirms momentum turning downward.
US Dollar Index is sitting on 102.00 within a 101.50 to 103.50 range where a top appears to be forming. RSI drifting under 50 indicates upward momentum fading.
EURUSD ran into resistance at its 50-day average near 1.0630 and has dropped back toward $1.0560 in what looks like a normal trading correction. Support has moved up from $1.0500 and RFSI is holding 50 keeping its underlying upswing intact.
GBPUSD is still sinking with its $1.2175 breakdown point becoming new lower resistance and the pair trading between $1.2130 and $1.2160. Next potential support appears near $1.2060 with next potential resistance near $1.2290.
NZDUSD remains under distribution falling back under $0.7000 after failing to overcome resistance at a lower high near $0.7055. The 50 day average recently completed a downward death cross of the 200-day average a sign of distribution. Next potential support near $0.6945 then $0.6870.
AUDUSD continues to climb with the RSI decisively clearing 50 signalling an upturn in momentum. The pair has rallied up off $0.7300 into the $0.7360 to $0.7290 area with next potential resistance near $0.7400 and the 50-day average followed by $0.7500 near the 200-day average.
USDSGD has paused in the $1.4255 to $1.4400 range recently trading near $1.4360 with initial support near $1.4330 as it digests a drop down from $1.4500 to start the year. RSI retesting 50 as resistance following a breakdown is holding which suggests a downtrend emerging with next downside support near $1.4150.
USDJPY held support near the 115.00 round number and 50 on the RSI and bounced back up toward 116.30 before drifting back toward 115.75. It continues to form a descending triangle indicating distribution below 117.50.
GBPJPY is at an interesting technical turning point. The 50 and 200-day averages are close to a golden cross but the pair is breaking down, taking out both averages in the last two days as it drops from near 142.25 toward a test of the 140.00 round number. The pair has been trading between 140.40 and 141.70. RSI under 50 and falling indicates momentum turning downward.
EURJPY is retreating within a 121.00 to 124.00 trading range falling from near 122.80 toward 122.20. RSI falling toward 50 indicates upward momentum fading and a downturn pending. Next support possible near the 120.00 round number.
USDCAD is sending mixed signals. Trading below $1.3300 Fibonacci resistance looks like a downswing underway but it still needs to take out higher lows near $1.3200 and in the RSI to call off its underlying uptrend. Next support possible at the 200-day average near $1.3095 with next resistance at the 50-day average near $1.3380.
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.