Oil and SP500 bounce from Local LowsWe got a new player in the Trade Wars – Rare Earth Elements. According to some sources, China is seriously considering restricting exports of those metals to the US.
We do not know if that is the truth or will it even happen but definitely it adds more risk to the market, especially stocks and Oil.
With Oil we will start this analysis. As expected, Crude went lower and tested the mid-term horizontal support for the second time. It was anticipated, as before, the price created a wedge and later broked the lower line of this pattern. Second test of the 58 USD/bbl support was positive for buyers as they managed to bounce from it. As for now it is too early for the buy signal but it will be triggered, when the price will break the neckline of the double bottom formation on the 59.6 bbl/USD.
This week is so far very bad for the SP500, which is currently on the lowest levels since the 11th of March. The price broke two dynamic supports and a horizontal one. Today, we are aiming to test those as a closest resistance but as long as we are below, the sell signal is ON.
Last instrument is the AUDJPY, where Thursday brings us the breakout from the small symmetric triangle pattern. From the technical point of view, that is pretty straight forward – the breakout is to the upside so it brings us the buy signal.
This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis