Wednesday, August 3, 2011

US Index Technical Analysis - August 3, 3011

03/08/2011 SP500
The vote on the raising of the United States debt ceiling was successfully passed by the Senate yesterday. However, investors do not appear to be impressed, especially against the background of very real fears that the United States perfect credit rating is in danger of being lowered. A wave of steep drops swept across the financial markets yesterday when the S&P index dived down by 2.5%, to a record low level of 1248 dollars.

The technical picture for the index shows that it is still within the shuffling pattern which it entered some six months ago. So long as the index is traded above it lowest level of 1215 dollars, the estimate is that at some stage it can be expected to renew it upwards movement towards the upper half of the pattern. It is important to stress that a break of the channel in a downwards direction, along with negative sentiments in the markets, will force us to reset the trend direction for the S&P index and the other markets/

03/08/2011 NSDQ
Two of the world's largest credit rating agencies, Moodeys and Fitch, announced yesterday, immediately after the success of the vote to raise the United States credit ceiling, that they had decided to leave the United States credit rating unchanged at its perfect rating. At the same time, Moodeys revised its rating forecast for the US to negative, which, in most cases, is evidence for a possible lowering of the credit rating in the near future.

At a technical level, the NASDAQ index still hasn't reached the important support level of 2200 dollars. From this level and down to the lower level at 2120, the index begins to offer a very attractive buy possibility as it enters the lower half of the shuffling pattern that has characterized it since February. Similar to the analysis for the S&P index, here to a breakthrough of the bottom level of the channel at 2120 will lead to a re-evaluation regarding the definition for the NADAQ's main trend direction.

03/08/2011 EUR/JPY
The sorry state of the financial markets over the last few weeks has also had a negative impact on the euro – Japanese yen pair that fell all the way to the low support level of 108.70. The harmonic reverse pattern (Bullish Bat) that appears on the pair's daily graph is signaling for a potential change of direction and a move to increasing exchange rates. When we add to this that the positive deviation in the MACD indicator then we have an interesting opportunity to buy the pair at a cheapened price and close to a strong support level.

At the same time, we must not ignore the heavy negative sentiments that exist amongst investors, so that a break in the support level at around 108.60 will lead to a fast move towards a short position with a short term price target set at around the significant support level of 106 yen to the euro. A break beneath this level will be the sign for a change in the definition of the pairs main trend lines direction from a horizontal main tend line (shuffling) to a falling main trend line.

03/08/2011 GBP/AUD

The United Kingdom – Australian dollar pair is at a historical low point, right on the edge of a very strong support level that succeeded in checking the exchange rate collapse last month. Just a small technical correction could well lead the pair to the resistance level of 1.6160. We can also see the 200 day moving average line that passes close to the levels of 1.5460 and which can be used as a key point for a partial realization.

As the United Kingdom pound – Australian dollar pair usually has a negative correlation with the financial markets, then the negative sentiments in the markets can be expected to help the pair in its potential upwards movement. Also, a long position on the pair could be used as hedging for a portfolio with a positive exposure to the markets.

by YouTradeFX