A Bearish Reversal On The Cards For ASX200?

  • 26 Nov 2020


The USD/JPY pair has begun to follow the previous pattern of price action, tracing the descending trendline lower to once again test the 104.29 support level. A series of doji candles in the last three trading sessions has halted the break. Momentum indicators have flattened in bearish territory.






The GBP/USD pair has found an obstacle in the 1.338 resistance level which has slowed the rally. The pattern of price action indicates that sentiment is bullish and further highs may be on the cards. There also appears to be room for further upside despite RSI approaching overbought conditions. 






A break of the 1.192 resistance area seems inevitable given the number of times it has been tested since July. Buyers still lack the appetite despite the Euro finding considerable support in recent trading. Fundamentals may not entirely support the rally, yet the dollar continues to suffer. Momentum indicators have upward trajectories. 






Gold has been held at the 1810.10 support level, with doji candles indicating the bearish sentiment is starting to fade. A longer-term bearish trend is being established with the descending trendline representing a price ceiling for the metal. Momentum indicators have stalled in bearish territory. 






Oil has surged passed a key resistance level at the 43.64 price line. The 47.60 price level is in sight as strong bullish momentum is driving the most recent move. Can it be sustained given the level of volatility in the commodity in recent months? Momentum indicators are already suggesting that WTI is overbought. 






The JP225 index has stalled at the 26,500 price level as buyers struggle to get over this price hurdle. A pullback may be expected and has been developing as a pattern of price action as the rally unfolds. We may therefore expect a period of consolidation before the index can gather enough momentum to push higher. Momentum indicators have stalled in bullish territory.






The ASX200 rally appears to have come to an abrupt standstill, facilitated by the break of the 6644 price line. Two doji candles may be the first signal that there is potential for a reversal. The next few trading session will provide clarity.  Momentum indicators show a deceleration in bullish sentiment with RSI moving beyond overbought levels.  


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