Top 3 charts of the week: USDIDX, AUDUSD, SPA35

12:09 PM September 4, 2018

Summary:

  • Will US dollar recover?
  • AUDUSD on the key support
  • European equities struggle against the US

August was a very untypical month as some markets enjoyed great flows (think US indices) while other were in a full crisis mode (Turkish lira in particular). Which way will it evolve in September? Will we see a broad-based risk averse mode or will emerging markets see a relief? A performance of the US dollar will have a lot to say about it and we analyse 2 USD charts. Meanwhile, European indices – like SPA35, could use some of the US resilience.

USDIDX – USD is not over

USDIDX rallied in early August but fell back towards the end of the month. Do notice that the Index is dominated by major pairs (especially EURUSD) so it doesn’t fully reflect USD strength against a broader basket of currencies. Even looking at the USDIDX it is clear that bulls are in a good position as they’ve managed to defend a 50-moving average band (you can see three lines measuring average calculated through lows, closes and highs) and a resistance area around 95 does not seem to be a big issue for them anymore. A major momentum of this rebound means that a resistance point is currently at previous highs of 97. The trend remains positive.

Source: xStation5

AUDUSD – a support of the last resort?

AUDUSD has been in a downward movement for a long time now, battered by overall USD sentiment, Trade War concerns as any damage to China will be negative for the Australian commodity exports, and finally – no prospects for rate hikes in the near future. This downward trend has been encompassed within a wedge formation and we see that although previous local lows acted as weak supports (there are candles with lower shades at those levels), this time we are at a “make or break” support level of 0.7150. A break lower would be a major catalyst and although this support seems to be decent, notice that the move has a lot of momentum.

Source: xStation5

SPA35 – a rebound or a free-fall?

While the US stocks are glued to all-time highs, Europe is in a much direr state. Spain has been in a bear market for more than a year now, pressed by mixed earnings and lingering Catalan crisis. A rapid sell-off over the past few sessions brought SPA35 (IBEX35 underlying) to the rock-support of 9300 points which – if broken – paves the way for a technically uncontrolled free-fall. Bulls are really against the wall here and if they plan to act, they should do it quick.

Source: xStation5

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