- Potential reversal signal on the Dow Jones (US30) chart
- USDCAD distances away from the 200-session moving average
- WTI (OIL.WTI) breaks back below the downward sloping trendline and deepens decline
US30
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Open account Try demo Download mobile app Download mobile appUS stocks rallied in the previous week, making a swift bounce off the lower limit of the trading range towards the upper limit. However, upward move on Dow Jones (US30), as well as S&P 500 (US500), was halted by the 50-session moving average. Following a failure to break above it, the index pulled back and painted a shooting star candlestick pattern (orange circle). In theory, such a formation surfacing during the upward move hints on an impending reversal. Indeed, the index launched new week lower. A pullback towards the lower limit of the range, marked by the support zone ranging below the 25400 pts handle, may be on the cards now. However, one should keep in mind that the price reacted to the upward sloping trendline and it may serve as the new lower bound of the range now.
Source: xStation5
USDCAD
Both the US and the Canadian dollar will draw attention this week due to labour market report releases scheduled for Friday (1:30 pm BST). Apart from that, CAD traders are also eagerly awaiting monetary policy decision of the Bank of Canada (Wednesday, 3:00 pm BST). Meanwhile, USDCAD keeps on trading within the long-term upward trend started in the third quarter of 2017. The pair bounced off the upward sloping trendline recently and rushed towards the resistance zone at 1.33 handle, that coincided with the 200-session moving average. After a brief struggle in the vicinity of the aforementioned moving average, a break higher was finally delivered and the pair found itself at the highest level since mid-June. The two levels to watch in case the upward move continues are 1.34 and 1.35 handles - limits of the short-term consolidation from May-June period. As long as the price remains above the 1.33 handle, bulls seem to be in market’s favour.
Source: xStation5
OIL.WTI
WTI (OIL.WTI) was close to making the biggest weekly gain since mid-June last week. However, comments from the Russian politicians hinting at crude output in the country increasing in August triggered a sharp decline on Friday. WTI pulled back from the vicinity of the 38.2% Fibo level of the downward move started in April and broke back below the downward sloping trendline. Oil remains under pressure this week as there are barely any signs of an improvement in the Sino-US relations and new round of tariffs took effect over the weekend. The closest near-term support level is the $53.10 handle - local low from 26 August. A break lower would pave the way towards the support zone ranging $51.30-52.00. A successful break above the aforementioned 38.2% Fibo level could invalidate the bearish setup.
Source: xStation5
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