Welcome to a brand spankin’ new trading week!
We’re all about trends and indices this week as we check out pullback levels for the S&P 500 Index (SPX 500) and the U.S. Dollar Index (DXY) and a breakout opportunity for NZD/JPY.
Don’t miss these daily chart setups!
Who’s trading U.S. stocks this week? If you are, then you should know that the S&P 500 index is poppin’ up a bearish divergence on the daily time frame!
The divergence is happening just as the stock index is knocking on the 61.8% Fibonacci level of August and September’s downswing AND the big 4,000 psychological level.
Prices trading above the 100 SMA should keep some bears at bay but keep an eye out for downside momentum that can lead to the S&P 500 extending its 2022 downtrend.
Momentum below 3,850 could drag the index back to the 3,700 inflection point if not October’s lows near 3,500. Yikes!
US Dollar Index (DXY): Daily
If fiat trading is more your thing, then y’all better pay attention to the U.S. Dollar Index (DXY) finding support from the daily chart’s 200 SMA.
The dollar looks set to retest a key trend line support that it broke earlier this month.
How high can the dollar fly before the sellers come back?
The 109.00 area is a good candidate as it lines up with the broken trend line, 100 SMA resistance, and the 38.2% Fibonacci retracement of October’s downswing.
If the 109.00 zone holds as resistance, then you gotta be open to DXY falling back to its November lows.
Don’t discount a return to the uptrend though! A strong bullish momentum above the 200 SMA could push DXY back above the broken trend line.
Keep close tabs on this one, folks!
Here’s one for the range AND trend playas!
NZD/JPY is knocking on the top of a 600-pip range that’s been around since March this year.
NZD bears can aim for the range support near 80.75 for maximum pips or just the 84.00 mid-range zone near the moving averages if NZD gains bearish momentum.
Meanwhile, NZD bulls can watch out for a clear breakout that would extend NZD/JPY’s slow but sure uptrend since April 2020.
An upside breakout could take NZD/JPY to the 90.00 previous area of interest if not the 94.00 highs seen in 2014.
Good luck and good trading this one!