On the daily chart below, we can
see that the broken trendline is acting as a strong support for the buyers, but the sellers
keep leaning on the red long period moving
average targeting a breakout. The market is getting nervous amid the stress in
the banking sector and emergency actions taken by the central banks.
Tonight the Fed took another
emergency action expanding the provision of US Dollars to other
major central banks via swap lines to enhance liquidity. This was taken as
another sign that things may be worse than it seems and the market went into
risk off during the APAC session.
In the 4
hour chart below, we can see that the buyers couldn’t break above the
trendline, and folded near it as sellers stepped in between the 61.8% Fibonacci
retracement level and the trendline.
There’s a
strong selling pressure at the moment and the sellers may be positioning again
for a breakout of the broken trendline support. The buyers may be cautious
trading into the FOMC meeting this week, so the sellers are likely to remain in
control.
In the 1
hour chart below, we can see that the price fell back into the range that was
created near the broken trendline. This is a sign of uncertainty. The moving
averages have now crossed to the downside, so the momentum is in favour of the
sellers.
If we get
a pullback, the sellers may lean on the minor trendline which will have confluence with the moving averages acting
as resistance. The buyers will need to break above the trendline and the
resistance zone at 3975 to start finding some conviction for another rally.