Besides enormous volatility as per summer season, the S&P benchmark is close to a long-term bearish reversal as the daily chart setup becomes negative. Ichimoku Cloud indicator has a bearish crossover of the leading span, the index slid below the cloud for the third time this month, all Ichimoku lines are headed south. Although Monday started the trading week on the positive tone, that bullish performance might give another lucrative opportunity to short the benchmark as the overall technical sentiment turned negative. On the upside, the level of 2900 points would be tough to overcome for the bulls as Ichimoku Base Line resistance comes there, while the bears are intended to re-enter the market with fresh short positions. On the other hand, the bottom of 2787.2 points since August 5 is the main target for the sellers. If the benchmark dropped below that static support, then a long-term downtrend would start.
The Swiss Franc reflected the general market’s sentiment this past week as USD/CHF did not have a bullish continuation after the test of 0.9870 resistance. The long upper shadow on the red candlestick on August 23 confirmed that suggestion. Although Parabolic SAR is still bullish, fast Commodity Channel Index points to a bearish continuation rather than a bullish reversal. The ADX and DI indicator are also bearish as the negative surplus between -DI and +DI lines grow, while the mainline is edging above the threshold, pointing to a growing bearish momentum. The overall formation reminds an asymmetric triangle with the baseline at around 0.9692/9715. If the bears were able to push the pair below that support range, then the downtrend would accelerate as the bulls will be forced to move postponed buy-orders lower. On the other side, pivot points are as follows: 0.9834, 0.9878 and 0.9906. Those rates are attractive for fresh short positions.
The Japanese yen gapped this weekend on the lower side as Friday’s bearish action continued in the week open. As a result, the pair had renewed the recent bottom and charted a new low at 104.45 compared to the previous whipsaw noticed on January 3. The nearest resistance is coming with 21-days exponential moving average as USD/JPY failed to close a day above it since the bearish breakthrough on August 1. The exchange rate at around 106.80 looks attractive for fresh shorts in case if the market would get there. So far, both moving averages are headed south, and there are no reasons to reverse the downtrend, according to the daily timeframe technical analysis. The round-figure support level at 105.00 is the closest target for the bears.
The British pound gained strength versus the U.S. dollar and Euro this past week. However, the bearish retracement for EUR/GBP on the daily chart might come to an end as the rate reached the bottom of the Bollinger Band, and the volatility lowered compared to previous weeks. As long as there is no bearish breakthrough signal, the pair could come back to the middle line of the range at 0.9171, and consolidate there before a new trend started. On the other hand, the upside pressure might be limited at 0.9100 round-figure resistance as the bears could step in with heavy-volume sales. It’s recommended to have a wait-and-see position for the cross-rate until a strong signal occurred on the daily chart.
The New Zealand dollar is testing long-term support trendline, which used to hold the bears since January 2. The long downside shadow on the daily candlestick below 0.6350 support confirms that the bulls are not ready to give up the defensive barrier for now. MACD trend indicator is extremely bearish, however, the histogram is edging higher, pointing to the fact that the momentum is getting exhausted. RSI fast oscillator is extremely oversold, but it’s not leaving the bearish zone yet, and further selling pressure is possible due to that technical sentiment. It’s too early to talk about a possible bullish reversal, given the speed of the downtrend. However, a healthy retracement is required if the bears are intended to keep selling the Kiwi versus major currencies. Pivot points to watch 0.6414, 0.6440 and 0.6500.
USD/CAD is stuck between two strong technical levels. On one side, the USD/CAD currency pair cannot eliminate the round-figure resistance at 1.3300 as short-sellers step in with heavy-volume entries every time the pair tries to edge higher. On the other hand, Ichimoku Conversion Line acts as a support, limiting losses. A breakout of any of the levels mentioned above is needed to conclude further trend’s direction. If the upper band of the Ichimoku Cloud was breached, then the bullish crossover of the leading span would be confirmed. Otherwise, USD/CAD could come back to the uncertainty zone inside the cloud, and a sideways action would be more likely. The nearest support comes rather far from current rates as Ichimoku Base Line is 100 pips lower. We’d stay squared on the pair for a while.