Momentum Based Trend Line Breaks You Must Watch Today
By: Mary McNamara - Market Analyst
There has been little change since yesterday’s update as some trading instruments hover near key S/R levels ahead of the scheduled signing of Phase One of the US-China trade deal. Momentum on many charts is low and declining but this gives traders a good visual opportunity to assess when the situation changes: the mantra is the same: watch for momentum-based trend line breakouts.
DXY daily: the index printed another indecision daily candle; that’s three in a row now! I still consider that many currency pairs will remain range-bound until there is a decisive breakout from this US$ Flag pattern.
S&P500 4hr: the index is hovering under the resistance of the whole-number 3,000 level and the next directional move, either up or down, might depend on the signing of the US-China trade deal. Note the recent support trend line, that ignores the big spike, so watch for any break here but, if to the downside, then watch for any potential Bull Flag. Any developing weakness though would bring the next support trend line into focus as this is also near the 4hr chart’s 61.8% fib.
ASX-200 4hr: the ASX-200 printed a new all-time yesterday but might struggle a bit now under the psychological 7,000 whole-number level, especially as other global stock indices are movingly cautiously ahead of the US-China trade deal signing. Watch for any trend line breakout here too but, if to the downside, then monitor for any potential Bull Flag. Another test of the pre-2020 all-time High, circa 6,893.70, would not be out of the question.
Gold 4hr: Gold contiues to hover near the $1,550 level, on declsining momentum, and we may not see a decisive directional move here until there is one displayed on the US$ index. A test of the 4hr chart’s 61.8% fib, circa $1,500, would not surprise either.
Oil 4hr: Oil is little moved from yesterday but the wedge is taking more shape. Watch for any new trend line breakout and reaction at $58 S/R.
EUR/USD 4hr: again, not much happening here; along with many other trading instruments. Note the low and declining momentum so watch for any change in this space and for any momentum-based trend line breakout:
AUD/USD 4hr: this breakout is still being pegged by the daily 200 EMA so watch this for any new momentum-based make or break move:
AUD/JPY 4hr: this breakout is still being pegged by the 76 level so watch this for any new make or break:
NZD/USD 4hr: the Kiwi is still consolidating above 0.68 so watch this, and trend lines, for any new momentum-based breakout:
GBP/USD 4hr: still consolidating near the 1.30 level and under a bear trend line so watch for any new momentum-based breakout:
USD/JPY 4hr: still consolidating near the 110 level so watch for any new make or break from here:
GBP/JPY 4hr: still consolidating near the 143 level, on declining momentum, so watch for any new make or break from here:
Analysis written by Mary McNamara, Market Analyst from Tradecharting.com