DAX, USD/JPY, XLU and NVDA Forecast – Markets Making Highs, Breaking Down, and Going Sideways All Offer Possibilities

DAX Technical Analysis

The first market I’m watching today is the DAX because it did break down pretty significantly during trading and I think Europe’s going to be a very interesting place to watch because if the energy concerns continue to be a major issue, and they look like they are going to be a major issue, then it’s likely that the DAX goes looking to the 23,000 euro level. After all, expensive energy does a number on companies.

You’ll notice that during the session we’ve had a couple of rough hours. I’m looking to see how the market behaves at 23,800 euro. Any signs of exhaustion there, I’m willing to short and have a go at the downside. This would be a multiple-day move would be my guess, but it does look like it’s setting up for some type of breakdown.

USD/JPY Technical Analysis

The US dollar against the Japanese yen is very interesting to me at the moment because we are threatening a 200-pip range that if we break above it, we start to talk about breaking resistance that goes all the way back to 1990. In other words, a buy-and-hold carry trade that could last forever essentially. I have a potential target on this breakout of 250 yen and that doesn’t mean that it would be an easy trade to take, but it could become part of a dividend-yielding forex portfolio essentially.

With that being said, I also expect that it will be very difficult to break out and therefore I’m watching this more than trading it at the moment, but this is a chart that I think all of you need to be very well aware of. When you zoom out you can see that there’s an area right around 160 yen that was a major peak and we’ve been forming a rounding bottom for ages.

But you’ll notice over the last couple of years we’ve just been zigzagging our way to the upside, testing this area and we’ve been here a couple of times previously. We’ll have to see if we can take it out because if we do, this is momentous.

XLU Technical Analysis

The chart in front of you is the XLU, that is the ETF for utilities in the United States. It does look like it’s going to open down but if we can stay above the $47 level for an hour, I’d be willing to buy it because it tells me that we’re still nervous. I do find it interesting that we’re pulling back a bit because utilities are generally thought of as a safety trade.

But I also think there’s probably some profit-taking heading into the weekend about to happen, so it could give a little bit of a false signal. If it really starts to take off to the upside though, that’s a sign that the indices are probably going to do fairly poorly, although some will outperform others. Utilities again being a safety trade, but this is one that recently made a fresh high, it’s pulled back a little bit, but it’s had buyers every time it’s pulled back in the last couple of days.

NVDA Technical Analysis

And finally, the last chart I’m looking at is Nvidia. I’m looking at Nvidia because it does look like it’s going to gap to kick off the trading session and I think the gap lower could offer a value play just waiting to happen. After all, Nvidia is well supported at the 200-day EMA and the $170 level. So, if we can get a little closer to that, I might be interested in buying some shares and riding it up.

The 50-day EMA at $185.34 is causing a little bit of resistance but if we can break above there, it opens up the door to $195 which is the ceiling at the moment. This is a simple range-bound trade, I wouldn’t make it any more complicated than that. Nivida of course is loved by a lot of people although it’s been dead money as of late, but that dead money has carved out a range that we can take advantage of.