Nick Nasad
All posts from Nick Nasad
Nick Nasad in Nick Nasad,

Global Overview: Equities Recover After Early Slide, JPY Crosses Follow Suit

US Equities Volatile, But Not Decisive: The S&P500 had a fairly volatile session today, though generally there wasn't any big news to drive the action.

The 1842 level continues to act as a key resistance for the index, and after testing it again today, the pair fell 16 points down to 1827, but then rallied back into the middle of the range the index has established since the middle of last week. The interpretation is that we have a choppy market, without clear catalysts one way or the other, and market participants have been digesting mixed earnings. The inability to move above 1842, and the sharp plunge through 1830, could suggest that bears may be dominant, but the buying interest at today's lows also neuters that point somewhat. I think the best guess is that we continue to see sideways action for the time being.

Gold Stumbles, While Oil Inches Higher:

In the commodities space gold fell from highs near 1260, down to 1235, and generally had a bearish session. However, it is using the 200-EMA (in gray) in the 4-hour timeframe as support and as we can see gold has been setting higher highs and higher lows since late December. A push through the 200-EMA could open up some further selling, but I would watch the 1220 area for support.

Oil (US Light Crude) had a nice little pop through key resistance at 94.65, moving it out of a short-term range, and building on the bottom it put in place in mid-January. It too tests its 200-EMA in the 4-hour timeframe. A further push higher would likely target the 97 level, which would be a 61.8% retracement of the downswing in oil from 101 to 91. However, a failure to break above the 200-EMA could mean a trip back down into the recent range, and possibly below, as it would mean a return to the dominant swing we saw in the first 2 weeks of the year. 

Yen Gained With Weak Equities, But Traders Bought the Dip: In the currency space, today's action was dominanted by moves in the JPY crosses as the Yen gained along with the drop in equities. However, the falls were contained and as US equiteis recovered, so did JPY crosses.

 In the above chart we are looking at the EUR/JPY which broke through a support trendline, but managed to find support at the 141 level (that coincided with the 800-ema in the hourly timeframe - which is roughly equivalent to the 200-ema in the 4-hour). This type of fall and bounce was seen throughout the JPY crosses and it will be interesting to see if JPY weakness returns as the Asian session traders come online. For this pair, the key resistance comes in at 141.80, which is the 200-ema in the 1-hour (in black) as well as a key "power-line" - a level that has acted both as support and resistance on recent price action.

I also analyzed and wrote about the GBP/USD, EUR/GBP, GBP/NZD, and USD/JPY today/yesterday which you can see by following the links.

Or click through to my WhoTrades Blog.