The stock market has staged an impressive reversal, with the Nasdaq erasing a loss of more than 350 points and turning positive. The index is now up 20 points at 24,952. The Dow Industrial Average has climbed 656 points, or 1.26%, while the S&P 500 is higher by 30 points, or 0.42%.
Meanwhile, crude oil has extended its decline, falling back below the $80.00 level and moving into an important technical support zone between $77.00 and $79.18, an area defined by prior swing highs and lows. A sustained break below that region would shift focus toward the 200-day moving average at $75.36. For now, the price is testing that key support area (see chart below).
Looking at the USD, the greenback is heading back to the downside.
EURUSD: The EURUSD has climbed back above its 100-hour moving average at 1.1387 and is now testing the next key technical hurdle at the 200-hour moving average (1.14065). A sustained break above that level would strengthen the bullish bias and shift the focus toward a series of recent swing highs at 1.1419, 1.1435, and 1.1450. Holding above the 200-hour moving average would give buyers greater control in the short term.
USDJPY: The USDJPY rallied to within a few pips of last week’s 40-year high at 163.98, reaching 163.94 before running into willing sellers and rotating lower. The pullback has the pair approaching its rising 100-hour moving average at 163.604, a level that proved pivotal yesterday when buyers leaned against it and sparked a rebound.
If sellers can push the price below the 100-hour moving average, the focus shifts to yesterday’s low at 163.325. A break below that level would target the July 21 swing high at 163.245, followed by the 200-hour moving average at 163.093. Those levels will be key in determining whether the current pullback develops into a deeper correction or simply provides another buying opportunity.
GBPUSD: The GBPUSD has pushed back above the 1.3298–1.3304 resistance zone, shifting the focus to the next key upside target: the falling 100-hour moving average at 1.33286. That moving average capped rallies on two separate occasions yesterday, reinforcing its importance as near-term resistance.
A sustained move above the 100-hour moving average would strengthen the bullish bias and open the door for a test of the 1.33406 swing level, followed by the 50% midpoint of the trading range from the June low at 1.33483. Those levels represent the next key hurdles if buyers are to build on today’s recovery.
This article was written by Greg Michalowski at investinglive.com.
