Wednesday, 6 June 2012

Mid-week markets wrap - Undollar rallies (mostly) - ASX 200, S&P 500, DAX, AUD/USD, EUR/USD. USD/JPY, Gold, Silver

Today's rally for most of the Undollar complex is a potential game changer, at least for the near term, so it's a good opportunity for a wrap of the daily candlestick charts. For each market I have linked to a recent longer term chart, to put the daily charts in context.

ASX 200 including after hours trade. The bigger picture remains bearish so long as the May high holds, though for comfort's sake I wouldn't like to see a rally back above the Fibo zone, ie. 38.2% to 61.8% retracement of the decline from the May high, roughly 4150 to 4300. A rally to that Fibo zone would be a normal retracement. A move back below 4000 would be a sign of large and immediate bearish potential. 

S&P 500 including after hours trade. I consider that the larger degree trend is down for this market and global equities generally unless/until this market rises above the monthly chart trend line at 1360ish.

DAX has rallied back above the trend line that had capped rally attempts earlier in the week. While this market remains below the 40 week moving average at 6230ish it holds considerable bearish potential, though the immediate downside potential is limited until/unless the market heads back below the trend line, currently 6000.

AUD/USD. Yesterday's "looks to be resuming down trend" call was clearly wrong. The AUD/USD is testing the nearby overhead trend line. Until it breaks upwards through that line, the immediate trend remains down, however bear in mind that this market has just tested previously solid long term support.  

EUR/USD has yet to break upwards through the tight trend line that has contained market action since the beginning of May. This market has recently tested support at a trend line drawn from the 2001 and 2002 lows.

USD/JPY is rising toward a test of the down trend line. Don't forget the big picture bullish wedge.

Gold did a brief re-test of the recent down trend line, and has resumed its rally, in the context of a long term up trend which is not yet complete.

GOLD.AX has pulled back since Monday's break out but remains well clear of the recent down trend line, and the monthly chart presents a long term up trend which remains alive unless the May low is broken.

Silver has now shown a clear break from its recent down trend channel, in the context of a long term up trend that is not yet complete.