The dollar strengthened again at the start of the week, further delaying the possibility of a trend reversal in the EUR/USD currency pair. A minor retest against the pound is also possible, though the uptrend there may continue. The forint weakened slightly this week, but it continues to trade within its usual range against the euro. Against the dollar, however, an uptrend is emerging, so there may even be room for further gains. The USD/JPY exchange rate has narrowed significantly, so an important directional decision may happen soon. The EUR/CHF has broken through the support level defining the uptrend, so its exchange rate is currently characterized by a downtrend.
The European markets continue to be characterized by choppy price action, with two days of gains often followed by two days of declines, reflecting the prevailing uncertainty among investors. Some sector rotation can be observed away from the previously market-leading technology sector and into other areas of the market. While attractive stock opportunities can still be found, we remain sceptical that a sustained momentum-driven move can develop in the current environment. As a result, strong directional trends appear unlikely for the time being. In such conditions, pullbacks and retests are likely to provide more favourable entry opportunities. This week, we highlight two French stocks from our screen.
There has been no change in the downward trend for gold and silver, but selling pressure is easing for both precious metals. As long as the trend lines driving the decline remain intact, a sustained reversal cannot be expected. The price of oil has broken through the 100 level, and the trend remains upward for now. Natural gas may correct higher following a sharp price decline. Copper, trading within a wider range, may be approaching the upper end of that range. After sharp declines, wheat and corn prices may have reached key levels where the likelihood of a reversal is increasing.
There has been no change in the downward trend; progressively lower swing highs and lows are forming a downward-sloping pattern. As long as the price remains below the thick red trendline, it’s best to wait for a reversal. A new low is also possible, with strong support expected around 3,906.
Resistance levels: 4,688; 4,843; 4,923; 5,000.
Support levels: 4,062; 3,906; 3,750.
There are still no signs of buying pressure. It’s worth keeping an eye on the red dotted line; a break above it could signal a buying opportunity later on. For that to happen, the price would simply need to close above 56.25 with a strong bullish candle. The next support level would be around 50.
Resistance levels: 62.5; 68.75; 75; 81.25; 87.5; 93.75; 100.
Support levels: 53.13; 50.
It managed to break through the $100 level a week ago, and the price has not fallen back since. This could pave the way toward this year’s annual highs. A break below the green dotted uptrend line could signal a change in structure. Of course, a drop back below $100 would already indicate weakness. A close below 93.75, however, would signal a short opportunity.
Resistance levels: 106,25; 112,5; 118.75; 125.
Support levels: 87,5; 81.25; 75.
The mild uptrend broke down a week ago, and after a sharp drop, the market became heavily oversold, calling for a correction. It’s worth keeping an eye on the red downtrend line; a trend-like rally could follow once it is broken. Above 3.125, a new uptrend could form; below that level, we can only speak of a correction.
Resistance levels: 3.516; 3.906; 4.688; 6.25; 7.04; 7.81.
Support levels: 2.714; 2.344; 1.953.
It continues to trade within a range. The upper end of this range could be a target, which might even include a slightly higher maximum. Strong resistance may be found above 7.04, while stronger support could extend between the 5.85 and 6.04 levels, which could already be a buying zone. Trading opportunities may arise in oversold and overbought areas.
Resistance levels: 7.04; 7.81
Support levels: 6.25; 6.04; 5.85; 5.66; 5.46; 5.27.
The correction may soon reach that support level (562), which should be very strong and could also serve as a buying opportunity. By then, the market may be so oversold that a technical correction would be expected. A strong reversal day could turn the decline around, but one could only trade on the long side for a small, short-term correction.
Resistance levels: 643; 688; 781; 813.
Support levels: 562; 531; 516; 500.
It is slowly approaching the previous breakout zone, which may have been the target of this decline. It will likely pause around 437, and a correction may follow. Given the sharp decline, the potential for an uptrend could be significant. A correction could also reach the strong resistance level around 500. Later, a close above the red trend line could signal a buy, but that’s still a long way off.
Resistance levels: 500; 531.2; 563.
Support levels: 437; 406.
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