S&P500 Daily chart 3:40PM EDT 7/10/2012
Risk-off trading dominated the US part of the 7/10 trading session. The S&P 500 daily chart shows today’s daily candle topping at the 1357 level and now pushing toward the 1330 area. We have some support and resistance pivots here, better seen in lower time-frames, but also a rising trendline seen in the daily chart. This rising trendline has held a bull run since the beginning of June.
Today’s price action starts to challenge this risk-on rally. Note that the RSI reading has remained under 60. A sign that the previously established bearish momentum is still intact. However, as it is stuck between 40 and 6o, the daily chart shows consolidation momentum. Price pushing below the rising trendline, as well as the daily RSI pushing below 40 are signs that the bears are in control again.
The next key levels to look for is around the 1303-1306 area, which is where the 200-day SMA is, as well as previous support pivots. Below 1300, we are likely going to retest the 1262.00 level.
During risk-off trading, which is reflected by a fall in the S&P500, safe haven currencies like the USD and JPY should get a boost, while commodity currencies like AUD, NZD, and CAD should be weighed. EUR and GBP are also pressured by risk aversion.
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist of FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.