After strong selling during late US session, prices traded flat in Asia with bears attempting to push below Yesterday’s low, seeking L3 right at the close. Bulls from Europe seen pushing prices back up with H3 and yesterday’s consolidation area between 1.3085 – 1.3115 potentially acting as resistance.
Rising Channel was broken during late US sell off. Asian trading saw a slight rebound which was unable to push price back to H3. Bulls will be comforted that they were able to fend off another sell off attempting to break previous low, and it appears that price could see Yesterday’s Low as a support for today.
Futures opened close to Yesterday’s Open with price looking optimistic during early trade. Despite last night late sell off, DAX is still posting Higher Highs and Higher Lows, demonstrating the strength of Bulls this week.
After breaking below the intersection of 2 upward trendline, price attempted to hit above but failed.
Resistance for today could be found between H3/H4 and it may take a very strong bullish momentum (perhaps to the tune of Spain bailout) that can push beyond H4 and also taking out Yesterday’s high at the same time. Traders will be looking at L3 and Yesterday’s Low for support, with a break below opening up consolidation area found on 16th Oct which coincides with L5 level.
Unlike the other currencies/equities which had a late night sell-off, Brent saw a late night rally instead, possibly a pull-back from the sharp decline that happened during Europe/US early session. Prices have been posting Lower Highs and Lower Lows, and the current rally observed could find resistance right around 113.8 which is the lows of 17th Oct.
The rally this week has been attributed largely to better than expected US earnings. Hence it is no surprise that after Google bombed with its earnings announcement, we saw bears immediately creeping back, pushing risk correlated assets lower. Assets have since bounced back from the lows, but we could see renewed selling once more should fear creep in once more if any major company disappoint today.