Coronavirus panic and crash in the oil market led to abnormal movements in the financial markets. Let's take a look at the current technical situation on oil, the German DAX index and the USDJPY currency pair.
OIL
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Create account Try a demo Download mobile app Download mobile appLet’s start today's analysis with the oil market, where price experienced the biggest crash in nearly 30 years. Oil plunged the most since 1991 what also had an impact on the stock market. The price of commodity slumped more than 30% on Monday. Looking technically at W1 interval, one can see that the decline stopped slightly below the 88.6% retracement of the upward impulse started in 2016. According to the harmonic analysis, there is a chance of painting the bullish XABCD pattern. However, the signal will only appear once W1 candlestick closes at its high. In such a scenario, the upward correction may extend towards the resistance at the $50 handle, marked with previous price reactions and the earriler broken 61.8% Fibonacci retracement. The would be invalidated once the price drops below the recent lows at $27.
OIL W1 interval. Source: xStation5
DE30
Major indices around the world, including DAX, launched new week with a massive bearish gap. The German index plummeted over 1000 pts from Friday’s close on Monday! In spite of it, one may observe a strong upward bounce in the downward trend. Following a bounce off the support at 10350 pts, marked with the lows from 2018, DE30 reached the upper limit of the Overbalance structure. As long as the price sits below it, the continuation of a downward trend looks more probable. On the other hand, breaking above the psychological 11000 pts handle may lead to a bigger upward correction or even a test of the resistance area at 11350 pts.
DE30 D1 interval. Source: xStation5
USDJPY
USDJPY started a week with a bearish price gap just as the stock markets did. The gap was smaller, but the sellers managed to deepen decline to over 400 pips. Nevertheless, the sell-off was stopped after Donald Trump said that he would discuss tax cuts with Congress. Buyers managed to halt declines ahead of a key support of 100.00. The pair is trading at the key resistance zone now, which is marked with previous price reactions. As long as the price sits below it, the further downward move looks possible. However, a break higher may lead to a bigger upward move. In such a scenario, the area near 105.00 handle should be viewed as key level.
USDJPY W1 interval. Source: xStation5
