This article was last updated on April 16, 2022
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Market Insights
Trading across global markets is very mixed today indicating indecision and uncertainty among investors.
Despite another round of generally positive earnings overnight, led by strong results from Tesla Motors and Texas Instruments, US indices are only marginally higher, while the FTSE and Dax are marginally lower.
Currency markets are also mixed on overnight news. GBP has strengthened a bit with UK Q3 GDP exceeding expectations. Oil sensitive currencies like CAD and NOK have rebounded a bit with Oil stabilizing overnight even though WTI remains under $50.00. NOK and SEK are heading in opposite directions after Norges Bank held its benchmark rate at 0.50% while Sweden’s Riksbank held its rate at (0.50%) but suggested it could keep its rate negative for longer.
It looks like the Belgians have finally gotten their act together and are prepared to sign on to the CETA trade agreement between the EU and Canada. This may have some influence here but it’s more important for the EU to show that it can actually get a deal done with anybody with US talks dragging on and Brexit talks looming next year. It’s unclear at this time if PM Trudeau will still be heading to Europe to sign off on the deal or not.
Action in defensive havens appears particularly perplexing. Gold has turned upward in recent days tracking an uptick in the polls for Donald Trump suggesting some political risk concerns starting to build. However, were not seeing broad movement into defensive currencies as JPY continues to retreat.
It’s been a big week for mergers and that focus is firmly on the technology sector today. Qualcomm has agreed to purchase NXP Semiconductors for $47 Billion in cash already. Twitter reported earnings this morning and did not announce a takeover bid as some had speculated with the company being shopped around lately.
Twitter did announce EPS of $0.13 above the $0.09 the street had expected. The struggling social media announced it is cutting its workforce by 9%. This announcement looks like Twitter may be primping itself in the hope of attracting a better bid perhaps later today, perhaps in the coming weeks. The longer we go without a bid, however, the more likely the company may continue on alone. Twitter shares have popped upward in premarket trading.
There’s a lot more news on the way today in US markets with durable goods orders due before the open plus earnings from Google and Amazon.com due after the close.
Chart Signals
Chart Signals: Reversal signs emerge across markets, key test underway for WTI
A lot of markets are showing signs of trend changes this week. GBP is recovering nicely against USD following a bear trap washout while US NDAQ 100 has started to retreat following a bull trap peak. A double top appears in place for the USD index while a head and shoulders top has formed in the US SPX 500. WTI is testing $49.00 with a double top and rounded top emerging there as well.
A recent upturn in the polls appears to be starting to have an impact on the markets. Gold started to turn upward earlier this week and now MXN is breaking down (USDMXN breakout from a downtrend).
North American and European Indices
US 30 is bouncing around between 18,170 and 18,250 but it needs to retake 50 on the RSI plus its 50-day average and a downtrend resistance line near 18,275 to signal an upturn with next potential resistance near 18,300 a sideways channel top.
US NDAQ 100 has levelled off in the 4,850 to 4,875 area but a bull trap top still sticks out like a sore thumb. RSI still trending down into the 40-60 area suggests momentum downshifting from upward to neutral.
US SPX 500 is still stuck below 2,150 the rising neckline of a head and shoulder top with initial support near 2,135 then 2,100 the flat neckline, a round number and the 23% Fibonacci retracement. RSI needs to retake to signal an upturn and call off the current distribution trend.
UK 100 remains stuck below 7,000 near the bottom of its 6,925 to 7,110 trading range. RSI under 50 suggests momentum turning downward with next potential support in the 6,770-6,800 area.
Germany 30 has stabilized in the 10,650 to 10,770 area down from 10,800 resistance but above support at the 50-day average near 10,555 followed by 10,500. RSI failing at 60 and rolling over suggests an emerging downtrend.
Commodities
Gold continues to trade near $1,268 and its 200-day average as its recovery trend up off $1,250 continues with next resistance possible near $1,276 then $1,282. RSI rising toward 50 indicates downward pressure easing.
Crude Oil WTI has a key support test underway sitting on $49.00 and 50 on the RSI where breakdowns would complete a rounded top plus a double top and signal the start of a new downtrend with next potential support near $47.00 and the 50-day average.
FX
US Dollar Index keeps quietly drifting downward away from 99.00 resistance toward 98.50 with next potential support near 98.15 then 97.60. An overbought RSI and a double top suggest recent uptrend overextended and peaking with a significant downward correction possible.
USDJPY is taking another run at resistance in the 105.00to 105.25 area near a round number and 23% Fibonacci retracement, recently trading near 104.75. RSI confirms upward momentum increasing. Support rises toward 104.55.
EURUSD is holding just above $1.0900 where a bounce has eased oversold conditions but it remains way short of the $1.1000 level it needs to clear to call off its current downtrend. More support in place near $1.0850 its recent low.
EURGBP has stabilized near 0.8900 for now having completed a 23% retracement of its previous uptrend. It remains in a downturn below 0.9000 and with RSI still sinking, this correction could deepen with next support possible near 0.8820 then 0.8720.
GBPUSD is turning back upward having shrugged off a selloff earlier this week as a head fake and washout of weak hands. RSI above 30 and rising indicates downward pressure easing. Support has moved up toward $1.2200 with Cable advancing into the $1.2250 to $1.2270 area. Next potential resistance on trend near $1.2330 then $1.2460.
USDCAD is bumping up against resistance near $1.3400 but holding well above its $1.3310 breakout point and Fibonacci support trading near $1.3380. RSI near 60 where a breakout would confirm a strengthening uptrend with next potential resistance near the $1.3500 round number.
CADUSD has stabilized in the $0.7460 to $0.7530 range trading near $0.7475 below $0.7500. RSI continues to fall suggesting this could be a pause within an ongoing downtrend with next potential support near $0.7410.
USDMXN is breaking out of a downtrend today in both the pair and the RSI, clearing 18.70 to signal the start of a new upswing with next potential resistance in the 18.90 to 19.00 range near its 50-day average and a round number.
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