GER30 had a major sell-off today, clearing multiple key levels of support on the way down to 12.965 points. Traders will keep a close eye on the 12.880 support level, as a break below could path the way for a retracement towards the 200 DMA - currently near 12.630 points. The Daily RSI is indicating that the index is not yet in oversold territory, suggesting there might be scope for further losses.
The US500 came under pressure as well, briefly testing the key 3212 support level. The index managed to bounce off that level, but it is not yet out of the danger zone. A clear break below that level could trigger further momentum selling, pushing the US500 towards the next significant level of support at 3158 points.
The USDJPY uptrend could end abruptly if the risk-off sentiment prevails. Major support at 110.25 remains intact following today´s correction, but demand for safe havens could push the currency pair lower, and a break below 110 may force more JPY bears to cover their positions. Support would then be seen at 109.80, followed by 108.25.
Is the rally in XAUUSD sustainable? While the Daily RSI is showing overbought conditions, it is difficult to go against this strong uptrend, especially as many investors remain nervous and prefer to move into safe havens, such as Gold. The key level to watch are $1648 and $1611, while to the topside, resistance is seen at $1688, followed by $1700.
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Ongoing rate curve repricing and risk asset reaction perfectly illustrate how worryingly reliant investors have become on easy money policies