(Slobodan Drvenica – Windsor Brokers)
WTI oil started the week in negative mode, falling 1.7% during Asian and early European trading on Monday.
Crude oil is pressured by fears of recession that would significantly slow global economy and lower demand for energies, while strong dollar on prospects of further aggressive steps of the Fed towards its monetary policy, adds to negative sentiment
The contract remains in red following three consecutive weeks of losses, as well as falling for the fourth straight month.
Fresh weakness probes again through pivotal Fibo support at $83.13 (38.2% of $6.52/$130.48, Apr 2020/Mar 2022 rally), with firm break here to generate bearish signal for retest of key near-term support at $81.17 (nine-month low, posted on Sep 8).
Bearish technical studies on daily and weekly chart support the action, with upticks expected to provide better selling opportunities.
Upticks will face solid resistance from daily Tenkan-sen ($85.50) which should ideally cap.
Only break above $90 zone (daily Kijun-sen / Sep 14 lower top / psychological) would sideline bear
Res: 85.50; 86.16; 88.68; 89.40.
Sup: 82.73; 81.17; 80.00; 78.48.
Daily recommendations on major – USD/JPY
USD/JPY – 143.44
Although dollar’s rebound to 144.95 last Wednesday suggests pullback from September’s 24-year peak at 144.98 has ended, subsequent selloff to 142.56 the same day on yen intervention warnings by Japan officials and daily sideways swings would yield further consolidation before up and above 143.80 would head to 144.45/55.
On the downside, only a daily close below 142.56 would risk stronger retracement to 142.05/15.
Data to be released later
U.K. market holiday, Japan market holiday, EU construction output.
Canada producer prices and U.S. NAHB housing market index on Monday.
Weekly waves: GBP/USD, gas and Bitcoin
(Chris Svorcik – Elite CurrenSea)
– Price action is expected to continue with its downtrend (red arrows) as part of a wave 3 (yellow). The main targets are the Fibonacci at 1.1325, 1.1250, and 1.1175.
– The NGAS chart offers a classical head and shoulders reversal chart pattern (orange boxes).
– The BTC break of the bottom should complete the bullish, shallow wave 4 (yellow) and start the bearish wave 5 (yellow).
GBP/USD bears take control and break bottom
The GBP/USD made a bullish retracement to and bearish bounce at the 38.2% Fibonacci resistance level:
- The GBP/USD bounce at the 38.2% Fib indicates a wave 4 (pink) pattern.
- Price action has now broken below the bottom after a strong bearish decline, which has been labeled as a wave 1 (yellow).
- Price action is expected to continue with its downtrend (red arrows) as part of a wave 3 (yellow).
- The main targets are the Fibonacci levels at 1.1325, 1.1250, and 1.1175.
- Eventually a shallow retracement is expected to occur within wave 4 (yellow).
- The retracement should not break above the previous bottoms and resistance zones (red boxes).
- A further decline is then expected within wave 5 (yellow).
- A bullish push above the resistance levels makes it likely that another wave pattern is valid.
NGAS head and shoulders pattern indicates reversal
The NGAS 4 hour chart is showing a reversal chart pattern:
- The NGAS chart offers a classical head and shoulders reversal chart pattern (orange boxes).
- The bullish push up within wave B/2 stopped at the 61.8% Fibonacci level.
- The bearish decline after the bearish bounce has been very strong and is likely some type of wave 3 (yellow).
- A mild retracement within the wave 4 (yellow) could take price eventually back to the 23.6% or 38.2% Fibonacci levels.
- A deeper bullish retracement invalidates the wave 4 (yellow) pattern.
- A bearish continuation aims for the Fibonacci targets down below.
- If price action only reaches the -27.2% Fibonacci target, then it’s most likely a wave C ([pink). If price action goes to the -61.8% Fib, then it could be either a wave 3 or C.
- A break below the -61.8% Fibonacci level indicates a wave 3 (pink).
BTC/USD breaks low and prepares for decline
Bitcoin (BTC/USD) is breaking the bottom and low for a continuation of the downtrend:
- The BTC/USD bulls are disappointed yet again after a bullish rally was unable to break above the resistance zone.
- The break of the bottom should complete the bullish, shallow wave 4 (yellow) and start the bearish wave 5 (yellow).
- The main target is the -27.2% Fibonacci target around $12k with an important zone around the round level of $15k.
- The wave 5 (yellow) could move lower within a falling wedge reversal chart pattern (orange lines).
- A strong bullish bounce is needed to confirm the start of any reversal (blue arrows)
- The wave 5 (yellow) would complete a wave C (pink) of wave W (pink) or wave 2 (gray).
The analysis has been done with the indicators and template from the SWAT method simple wave analysis and trading. For more daily technical and wave analysis and updates, sign-up to our newsletter.