Originally published by CMC Markets
Multiple three day star reversal patterns combined with one day hammers, shooting stars and a gravestone doji indicate that between Friday and today, a number of major technical trend changes have started in forex pairs. Meanwhile, major indices have been rallying to start the week.
Asia Pacific Indices
The S&P/ASX 200 has regained 5,700 and broken out of a short term downtrend but is bumping into resistance at its 50 and 200-day averages near 5,730. Next potential resistance near 5,800 the top of a longer-term sideways trading channel. RSI peeking back up above 50 indicates momentum turning upward.
The Nikkei 225 has cleared 19,500 and its 200-day average, confirming the start of an upswing within its 19,240 to 19,795 trading range between Fibonacci levels with the 50-day average also near the top. RSI regaining 50 confirms momentum turning upward with next potential resistance near 19.925.
The Hang Seng held 27,480 support and has rallied back up through 28,000 and on toward 28,045. Next potential resistance at the August high near 28,190. Rising RSI confirms increasing upward momentum.
North American and European Indices
The Nasdaq 100 held 5,900 support and continues to trade between there and 6,000 recently near 5,980 in what looks like another pause within an ongoing uptrend. RSI indicates momentum has downshifted into neutral.
The FTSE 100 has peeked back above the middle of its 7,300 to 7,500 trading channel toward 7,425while the RSI has peeked back up above 50 to confirm an upswing underway within a broad sideways trend.
The DAX continues to accelerate upward, confirming last week’s breakout over 12,240 and its 50-day average that completed a base. Support climbs toward 12,345 with the index advancing on 12,500 and next resistance possible near 12,575. RSI confirms increasing upward momentum.
Commodities
Gold continues to form a significant top with an Evening Star candle pattern forming. Friday’s spike up above $1.350 that failed looks like a shooting star peak. Today’s slump back under $1,340 toward $1,330 looks like bears taking charge especially with the RSI falling under 70 a common sign that a correction of overbought conditions has started. Next support possible near $1,322 a 23% retracement of the recent price advance.
WTI crude oil’s Friday selloff was contained by its 50-day average near $47.40, as the price bounced off of $47.00 to set a higher low on trend. WTI has bounced back toward $48.00 with next resistance near $48.55 then $49.35. RSI suggests a sideways trend emerging perhaps between $45.50 and the 200-day average.
FX
The US Dollar Index appears to be forming a Morning Star bottom with the index stabilizing near 91.50 after testing 91.00 and forming a hammer candle on Friday. RSI suggests downward pressure levelling off. Initial rebound resistance possible near 92.00.
EUR/USD appears to be completing a bearish Evening Star candle pattern as the pair breaks below $1.2000 toward $1.1965. Friday’s failed breakout attempt increasingly looks like a buying climax, especially as a growing negative RSI divergence indicates slowing upward momentum. Next potential support possible near $1.1900 then $1.1825.
EUR/GBP’s retreat continues to accelerate. The RSI has broken down through 50 to signal a downturn in momentum, while the pair has dropped below 0.9100. Nest potential support near 0.9070 a 23% retracement of the recent uptrend then the 0.9000 round number.
GBP/USD has paused near $1.3200 to digest recent gains and work off an overbought RSI. Trading above $1.3150 confirms the recent breakout and continuing uptrend. Initial resistance appears at the August high near $1.3275.
NZD/USD failed to hold above $0.7300 and has retrenched back toward $0.7250 but it continues to form a rounded bottom base above support near $0.7225 then $0.7190. Initial resistance near $0.7275. RSI testing 50 where a breakout would signal an upturn but so far has confirmed continuing distribution.
AUD/USD appears to be close to completing a bearish Evening Star. Friday’s Shooting Star/Gravestone Doji spike up toward $0.8100 looks like a buying climax and the slump back toward $0.8030 suggests bulls losing ground. A break of $0.8000 would signal a downturn with next support possible near $0.7935.
USD/SGD appears to be completing a bullish Morning Star with a rally today up from $1.3400 toward $1.3455 confirming Friday’s hammer as a bear trap selling climax. RSI rising toward 50 confirms downward pressure easing. Next resistance possible near the $1.3500 round number.
USD/JPY appears to be forming a bullish Morning Star pattern. Friday’s dip down toward 107.30 looks like a bear trap washout with the pair soaring back up through 109.00 and on toward 109.30. Next rebound resistance possible near the 110.00 round number.
GBP/JPY is breaking out to the upside, clearing 143.00 and rallying toward its 50-day average near 144.00 with next potential resistance at the 145.00 round number. RSI breaking out over 50 confirms momentum turning increasingly upward.
EUR/JPY successfully tested its 50-day average near 129.80 and has regained 130.00, The pair has advanced on 130.80 with next resistance possible near 131.00 then 131.85. RSI climbing up off of 50 signals underlying accumulation accelerating.
USD/CAD may be starting to form a base trading near $1.2100 after the pair successfully tested $1.2035 Fibonacci support on Friday. Initial resistance appears in the $1.2175 to $1.2200 area.