News & Analysis

Eightcap CFD technical insights 31/01/18

Jan 31, 2018 | CFD News

Monday we saw selling, last night we saw dumping. US indices were hit hardest. Futures showed a 160 point deficit going into last nights session. Sellers extended this lead to a 372 point drop on the US30. European indices followed the red seeing strong falls. The UK100 losing 88 points. European indices look a lot sicker than the US and have below highs since mid-Jan. The US30 put in a new record high in Monday’s session before sellers took over. Inflation and T note yields have been spooking U.S investors this week. Weaker commodities and production helped knock Oil from it’s new weekly high on Monday. Technically a few things happening so we’ll have a look at several charts below.

US30 – Monday gave us a failed high that turned into a short-term trend break last night. possible support points can be seen in the green boxes there is a short-term point that may only offer temporary buyer fightback. Traders, I would be looking at how buyers take this sell-off. do we still have interested money on the sidelines? Will we see a consolidation develop with a higher low to possible continuation? I’d be wary of impulsive rallies we want to see something of more substance to avoid being set up for a deeper test lower.

GER30 – has been declining since the 24th of Jan. With price breaking and holding below both MAs and breaking its short-term trend line after breaking out of its range in 2017. The Longer term trend line is still in play but this market looks bearish atm. We’ve seen a lot of congestion in the area price is sitting around. 13160 has shown support and could hold up sellers. A break of that level and you would think momentum could take price back down to test 13,083 -12960. On the other side, if support reappears we should see a new consolidation start developing.

OIL – looked great until Monday! Friday’s session broke with a higher close after testing and rejecting Jan 16 previous high. All good looking signs. Buyers did break Friday’s close before sellers took over forcing another test of Jan 16 high, again being rejected. Last night fundamentals had an impact as US production is expected to increase spooking buyers, this combined with weaker commodities set the tone for the evening. It’s was the biggest fall we’ve seen since Nov 2017. price has basically been in one way traffic since Dec 2017. Looking at the price today we can see it’s returned to a key support zone that launched the last rally.  As with the US30 traders need to give this market some time to see if last night was a one-off. I’m interested in seeing how buyers and sellers react after the first buyer counter rally and where a new low will sit. A break below $63.20 is starting to show something very different as we’ve not seen close below $63.20 in this current rally.

Good Trading from Eightcap.

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