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Weekly Preview: Technical analysis on USDJPY, GBPUSD, USDCNH, XAUUSD, WTI, SPX

Market Analysis / 3 Min Read
Desmond Leong / 11 May 2020

Last week, markets rallied higher driven by a risk-on session on Friday. US stocks climbed higher for the third time last week, with the S&P 500 rallying more than 1%, while Nasdaq pared recent losses. Meanwhile, Gold extended its gains as a result of a weaker USD, while oil prices drifted higher as Saudi Arabia moved to prop up the oil market by increasing prices. Looking ahead, we remain cautious in the recovery of the market’s risk appetite, keeping in mind the growing tensions between US and China with regards to the origin of the Covid-19 virus, with US secretary of State, Pompeo indicating that there is “significant evidence” that it was engineered in the Wuhan laboratory. Elsewhere, steps to curb supply chains and investment flows in China by the US would be another factor that may cause the market’s risk appetite to deteriorate. 

CURRENCY: USDJPY

Chart by TradingView.com

Price is approaching 1st support at 105.48. Price is facing bullish pressure from 1st support where we remain bullish above this level. The 1st support level happens to where the horizontal overlap support lines up with 78.6% fib extension. MACD shows that histogram starts to print in green, indicating a possible bounce could occur from the support level. 

CURRENCY: GBPUSD

Chart by TradingView.com

Price reversed nicely from our first resistance, in line with our 78.6% fibonacci extension and 61.8% fibonacci retracement where we remain bearish below this level and could see a further drop to our first support level.

CURRENCY: USDCNH

Chart by TradingView.com

Price is facing bearish pressure as it went up to retest the 1st resistance where we remain bearish below this level. 1st resistance happens to be where the 127% fibonacci extension and horizontal swing high are. MACD is also showing a possible push down towards 1st support is likely. As China is the first country to resume normal work and life in the Covic-19 turmoil, CNH could likely see some upside.

CURRENCY: SPX

Chart by TradingView.com

Price is testing our first resistance level in line with our 61.8% fibonacci retracement and horizontal overlap resistance, where we could see a reversal below this level. A break below our first support level could provide a bearish acceleration to our second support level.

CURRENCY: XAUUSD

Chart by TradingView.com

Gold drifted higher over the course of this week. However, it is still within a longer term triangle configuration pattern. Price is currently testing descending trendline resistance, with stochastics also coming to test resistance where price reacted in the past. It is possible to see price do a limited push down below 1st resistance at 1729.29 towards 1st support at 1674.00.

CURRENCY: WTIUSD (USOIL)

Chart by TradingView.com

Oil prices drifted slightly higher this week as Saudi Arabia moves to prop up the oil market by raising prices. However, this move seems muted at best as oil prices started moving sideways within a broader range. Price is holding above long term moving average and MACD is still above 0, within bullish territory (despite pulling lower). Watch closely 1st resistance at 27.95. A clear candle break and close above this level will see oil prices rising higher.

The information is not to be construed as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any trading strategy. Readers should seek their own advice. Reproduction or redistribution of this information is not permitted.

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