Cool Cat Bounce

January 25, 2016

Cool Cat Bounce:
Another week begins with a fresh round of calls that the Oil bottom is in.

As I’ve said each time oil prints a single daily bullish candle and the headlines roll through my stream, zero technical damage has been done to the chart. This is a small bounce in a BIG bear market. Just make sure you continue to see it for what it is.

OIL Daily:
Commodities chart, OIL Daily, 160125
Click on chart to see a larger view.

Not a single reclaiming of a swing high and price still capped by major trend line resistance no matter which way you draw it.

With three central bank decisions on the cards this week (US, NZ and Japan), it is the RBNZ that is most likely to move. Following last week’s CPI miss, talk of further rate cuts has intensified and a surprise move here actually wouldn’t be that much of a surprise…

As for the Bank of Japan, with the improving appetite for traders to take positions in risk currencies (at least for 1 day), the ‘safe haven trade’ in the Japanese Yen could be somewhat unwound which would see USD/JPY rally.

USD/JPY Daily:
Forex chart, USDJPY Daily, 160125
Click on chart to see a larger view.

The above daily chart is a little bit messy, but the main feature highlighted is a possible re-test of previously broken trend line support coinciding with the 120.000 psychological level.

———-

Chart of the Day:
Nikkei225 Weekly:
Indices chart, Nikkei225 Weekly, 160125
Click on chart to see a larger view.

I guess the major trend line support across Indices markets have survived another week.

Compare this Nikkei chart to the one in the technical analysis post and you can see how buyers stepped in as soon as price tested the support level.

As we see from the SP500 chart in Thursday’s stocks on the brink blog, the fact that the US tested its own support level almost to the pip was a huge reason that the Japanese market rebounded like it did.

Nikkei225 Daily:
Indices chart, Nikkei225 Daily, 160125
Click on chart to see a larger view.

The Nikkei daily chart shows price action off the level a lot cleaner but this was all about the US market lead.

———

On the Calendar Monday:
While the Australia Day holiday is technically tomorrow, the fact that it falls on a Tuesday this year means that a large chunk of the country will have taken today off also. Keep that in mind if you’re looking for any big moves in the Aussie during Asia.

AUD NAB Business Confidence

EUR German Ifo Business Climate
EUR ECB President Draghi Speaks

Do you see opportunity trading Japanese markets? Take advantage of potential big moves on our free $50,000 demo trading account on MT4.

Dane Williams – @VantageFX

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