Press review - page 157
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The Nikkei tried to rally during the week, but as you can see found a lot of resistance at the 14,500 level. The area is a large, round, psychologically significant number that the markets will try to respect, but eventually the market will need to break above the top of the shooting star in order to go further to the upside, the move we expect to see. The breaking below of the 14,000 level will send this market falling significantly in the meantime. The upside is what we prefer, and think is most likely to happen.
The DAX broke to the upside during the week, but found the €9800 level to be a bit too resistive to overcome. With that, we pulled back and formed a massive shooting star, but the €9600 level is in and of itself a significant support level. Because of this, we feel that ultimately the market will follow the trend that it’s been in for some time, sending this market back above the €9800 level. With that in mind, we have no interest in selling this market and can only follow the longer-term trend.
The NASDAQ when back and forth during the sessions of the last week, and as a result it appears that the market really is a ready to go anywhere quite yet. The 4000 level has offered significant support previously, and as a result we feel that the market will ultimately go higher, as we are simply sitting on top of a significant amount of support. However, we also recognize that there is a nice potential for a large uptrend line that we are touching now. On a break above the highs from the last couple of weeks, essentially the 4200 level, we believe that the market goes much higher.
The previous week for the S&P 500 was back and forth and as a result we ended up forming the neutral candle that you see on the chart. This market is essentially consolidation between the 1900 level on the top, and the 1860 level on the bottom. With that, it appears that we are going to continue to go sideways for the short term, but ultimately we need a break above the 1900 level in order to start going long. That being the case, we believe that this market at that point in time would go to the 2000 level.
Silver markets tried to rally during the course of the week, but gave up most of the gains by the time we closed on Friday. We see the $20.00 level as massively resistive now, as the market has formed a shooting star. However, we have also formed a couple of hammers in this general vicinity, so the end of the day it’s probably going to be consolidation going forward. If we make a fresh, new low, then at that point time we would be willing to sell, but at this point in time would be very hesitant to do so. As far as buying is concerned, we needed at least a daily close above the $20.00 handle.
Gold markets went back and forth during the week, but essentially ended up relatively flat. We sit just below the $1300 level, which is a significant barrier, but it seems to also be the so-called “fair value” of the yellow metal at the moment. With that, we don’t really see much in the way of a trade until we get an impulsive candle, something that we are not seeing at the moment. Because of this, we feel that this is probably going to be more of a short-term traders market at this point.
USD/JPY pair went back and forth during the course of the week, but found the 101.25 level to be supportive yet again. In fact, that area is being protected by an uptrend line as well, so as a result we feel that this market will more than likely go higher from here, but could very well be contained within the consolidation area that we’ve been stuck in that has an upside limit of 103. Ultimately, we do believe that this market goes higher, but might take a little bit more time to breakout to the 105 level.
The USD/CAD pair initially tried to rally during the week, but as you can see we ended up falling. We rest right on the 1.0850 handle, an area of significant support. That being the case, we feel that a break down below here will more than likely send this market looking for the 1.07 level first, and then the 1.06 level where we would expect a significant amount of support. Any supportive candle down there, we would be more than willing to start buying. In the meantime though, it does look like this pair is probably going to see more weakness.
The NZD/USD pair tried to rally during the course of the week, but as you can see pulled back to form a shooting star for the second week in a row. It appears that we are in the middle of consolidation, so it’s difficult to imagine that were going to break down significantly from here, but the fact is that we will more than likely test the 0.85 level in the short term. We believe that a supportive candle in that area is a nice longer-term buying opportunity as the market should head to the 0.90.
The GBP/USD pair fell during the bulk of the week, but found enough support below to form a hammer. This hammer should send prices back to the upside, but we had a shooting star from the previous week right at the 1.70 level, an obvious resistance area on the longer-term charts. Because of this, we feel that this market will probably go higher, but it may be a bit of a grind from here as the resistance will have to be overcome. However, we get above the 1.70 level, we feel that this market will in fact go much higher, probably to the 1.75 level, if not higher than that. Obviously, that’s a longer-term Outlook, but ultimately we do see that this market has been very well supported and has had a nice uptrend for some time. In fact, the bottom of the hammer from the week touched that uptrend line that we just mentioned.
There should be a bit of a “floor” at the 1.65 handle, which has been massively supportive as well as resistive in the past. In fact, that’s a very thick support zone down to the 1.64 handle at the very least, so the on-demand unit broken to the downside are very slim at this point in time. With that, we think that buying on the dips will be done by short-term traders, and probably will remain so until we get to the 1.75 handle, whenever that ends up being.
If we did manage to break down below the 1.64 handle, we think at that point time the market would be somewhat broken, and would almost have to go down to the 1.60 handle if not lower than that given enough time. However, the interest rate differential continues to favor the British pound, and we see absolutely no reason to think why that’s going to change anytime soon, so ultimately we feel that we are in an uptrend going forward, thereby giving us much more confident on the long side of the equation in this pair.