With this month coming to a close, are we about to see profit-taking off these key inflection points?
I’m keeping tabs on these trend channels on the Nikkei 225 and WTI crude oil, as well as the range setup on EUR/NZD.
This range is goin’ strong, brothas!
My buddy Pip Diddy caught the support bounce in his watchlist last week, and now I’m eyeing a resistance test later on.
Stochastic is still heading north, so the pair might have some room to climb before sellers return. Then again, the 100 SMA appears to be holding as dynamic resistance for now and could be enough to send EUR/NZD back to the bottom at 1.6700.
Stronger selling pressure might even spur a breakdown and a selloff that’s the same height as the range. That’d be close to 300 pips!
WTI Crude Oil: 4-hour
Anyone up for a countertrend play?
WTI crude oil is cruising higher inside an ascending channel on the 4-hour chart, and price is hitting a ceiling at the channel resistance.
Stochastic is hinting that sellers could take over from here, as the oscillator is starting to turn lower from the overbought region. However, the 100 SMA is still above the 200 SMA to suggest that the uptrend could resume.
In that case, it might still be worth looking out for a quick dip to the nearby Fib levels. The 100 SMA lines up with the 38.2% Fib near the mid-channel area of interest while the 200 SMA dynamic support is near the 50% level.
The 61.8% retracement level is close to the channel bottom, which might be the line in the sand for a correction. If crude oil falls through this area, better watch out for a reversal!
Nikkei 225: 4-hour
Here’s one for the trend followers!
The Nikkei 225 index has been trending down over the past few months now, and it looks like another bearish wave is coming up.
The index is testing the descending channel resistance, which happens to line up with the dynamic inflection points at the moving averages. The 100 SMA just completed a bearish crossover, which means that the selloff is likely to resume.
At the same time, Stochastic is hanging out at the overbought territory to signal exhaustion among bulls. Turning lower would confirm that bears are back in action and could take the index down to the channel bottom soon.