Overview of popular markets: spotting key trends
I have struggled to find an interesting market to write about this week. Telling you that prices are going nowhere because we are stuck in sideways-trending markets makes for a pretty boring subject. But the truth is that of the 20 or so markets that I cover each day for my subscribers, many of them are in sideways trends.
The EUR/USD has been in a pretty clear sideways trend since at least the beginning of May despite all the focus on problems with Greek debt.
The stock markets are probably the most boring at the moment and in fact if you look at the chart of the FTSE we have really gone nowhere since the beginning of 2013. That is over two-and-a-half years of sideways action. Although this year did see some gains, reaching up to almost 7100, we sold off aggressively at the beginning of the summer and have been unable to recover those losses.
E-mini S&P is almost the same story, with no direction over the past five months, as you can see in the chart below.
The DAX has certainly been volatile, but mostly directionless when you look at a chart for the past three months. Today we are still trading at the same levels seen at the beginning of May.
Unsurprisingly, the Dow Jones is quite a similar picture to those charts above.
Even the US dollar index on the four-month chart could really only be described as a sideways trend despite all the speculation over an increase in interest rates before the end of this year.
So which markets are trending and in what direction?
WTI Crude has been in a negative trend now since June 2014. A recovery from March this year topped out in May and we saw a very boring sideways trend throughout May and June but July saw steep losses as the longer-term bear trend resumed.
In the very short term we had become oversold on the daily chart of course and we are seeing signs of stabilisation, with a positive candle formation on Tuesday signalling enough on the downside for this week at least. However I don’t see any reason to be looking for a reason to buy into this market in the longer term yet.
Gold has been in a very clear bear trend since mid-2011 but, as you know from my article last week, we are testing important longer-term Fibonacci and trendline support in the mid-1080s. Just be aware that a weekly/monthly close tonight below 1077 would signal bears remain in control of this market.
AUD/USD has been in quite a steep negative trend since 2013 and bears certainly seem to be firmly in control of this pair as you can see in the chart below. However be aware that we are approaching very important longer-term support in the 0.7180/0.7140 area.
GBP/USD has been stuck in a range over the past three weeks, but you could describe this as a bullish trending market over the past four months. We do appear to be holding nicely above the 100-day and 200-day moving averages and you can see that the blue 100-day moving average is fast approaching the red 200-day moving average.
Perhaps we will see a bullish crossover at some time in the month of August, which would help reinforce this short-term trend. However, bulls will need to push the pair above the 1.5700 area to establish a new leg up in this trend.
Jason Sen – Technical Analyst & Trader
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The content of this article is the personal opinion of the author and not Intertrader.com. The information and comments provided herein under no circumstances are to be considered an offer or solicitation to invest. Nothing herein should be construed as investment advice. The information provided is believed to be accurate at the date the information is produced.