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Technical Forecast for S&P 500, Dow, FTSE 100, DAX and Nikkei

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Technical Forecast for S&P 500, Dow, FTSE 100, DAX and Nikkei

S&P 500 Outlook: Index Fights Resistance, US Ground Boeing 737 Max Models.

DJIA: Dow Recovers from Fibonacci Support, Builds Rising Wedge.

– Are you looking for longer-term analysis of Equity prices? Check out our Quarterly Forecasts as part of the DailyFX Trading Guides.

It’s a week that started with fear following the tragedy in Ethiopia. A Boeing 737 Max crashed last weekend and Boeing stock gapped down aggressively to start the week. As one of the 30 constituents of the blue-chip index, this pushed the Dow Jones Industrial Average along with it. And despite a week of setbacks around that theme, with Canada announcing that they’re grounding all of these planes, followed by a similar statement from President Trump; the stock held support at a key area on the chart, assisting with recovery in the Dow as the S&P 500 moved-up for another test of fresh yearly highs.

For next week the big item on the calendar is Wednesday’s FOMC rate decision. There are minimal expectations for any rate hikes or future commitments to anything similar; but key will be what the bank says about continued balance sheet reduction and how the ultimate composition of the Fed’s balance sheet will look. This could create ripples through bond markets which could, in-turn, impact the global risk trade, pushing equities along with it.

S&P 500 Powers to Fresh 2019 High

The first week of March saw a pullback in the S&P 500 as the index failed to breakthrough a big area of resistance. This was from around the same zone that had produced resistance in the S&P in November and December, just ahead of a precipitous sell-off that saw the S&P trade all the way down to the 2334-area on the chart.

But since that low came-in, buyers have very much remained in-charge, pushing through January and February until the early-March retracement began to show. Last Friday saw stocks rally off of their Monthly lows, and that strength continued through this week to help produce a fresh 2019 high. This keeps the S&P 500 in a bullish position as one of the more attractive global indices available to traders. For next week the forecast will be set to bullish on the S&P 500.

Technical Forecast for the S&P 500: Bullish

S&P 500 Four-Hour Price Chart

sp 500 four hour price chart

Chart prepared by James Stanley

Looking for a fundamental perspective on equity? Check out the Weekly Equity Fundamental Forecast.

Dow Jones Lags Due to Boeing Trouble; Spends the Week Recovering

A similar backdrop had developed in the Dow in which a strong bullish theme through January and February took pause as a retracement showed in the first week of March. Prices in the Dow dipped down to the ‘s3’ support level looked at earlier last week, and that same support level helped to hold the lows for this week despite an outsized gap-lower in BA.

Since then, prices have continued to recover but the index remains a touch-less bullish than what was looked above in the S&P 500; and this can make for a more-challenging prospect of continuation given that price action remains subdued below the prior March high. The forecast on the Dow for next week will be set to neutral.

Technical forecast for the Dow for next week: Neutral

Dow Jones Daily Price Chart

Dow Jones DJIA Daily Price Chart

Chart prepared by James Stanley

FTSE 100 Recovers, Resistance Remains Near 7250

It was a strong finish to the week for the FTSE 100 as prices pushed up towards a re-test of 2019 highs around the 7250 level. That 7250 area was a prior area of support in the index that had last come into play in September of last year and so far this year that price has helped to cap the advance. If prices are able to push through this area on the chart, the door may soon open for bullish strategies. But, until then, the forecast will remain at neutral on the FTSE 100.

Technical Forecast for the FTSE 100 for Next Week: Neutral

FTSE 100 Daily Price Chart

FTSE 100 Daily Price Chart

Chart prepared by James Stanley

DAX Gains Capped at Key Fib – Room for More?

The German DAX rallied up to a fresh five-month-high this week; and this comes after an initial bearish move in response to last week’s news of the ECB triggering a fresh round of TLTRO’s. With a more-dovish backdrop in Europe, and continued recovery holding in the DAX through 2019, the door may be open for further gains. The forecast for next week will be set to bullish for the DAX.

Technical Forecast for the DAX for Next Week: Bullish

DAX Daily Price Chart

DAX 30 Daily Price Chart

Chart prepared by James Stanley

Nikkei in Middle of March Range; Subdued Below Fib Resistance

The Bank of Japan had a rather quiet rate decision this week and that was illustrated fairly-well in the Nikkei, which didn’t do much around that meeting. Prices in the index remain near the middle of the March range, and monthly resistance has held around the 50% marker of the Q4 sell-off. This keeps the index in a rather unattractive space for bullish strategies while bearish outlooks could be difficult to justify given the continuation of higher-lows that have held thus far in 2019. The outlook for next week will be set to neutral on the Nikkei.

Technical Outlook for the Nikkei: Neutral

Nikkei Daily Price Chart

Nikkei daily price chart

Chart prepared by James Stanley

To read more:

Are you looking for longer-term analysis on the U.S. Dollar? Our DailyFX Forecasts for Q3 have a section for each major currency, and we also offer a plethora of resources on USD-pairs such as EUR/USD, GBP/USD, USD/JPY, AUD/USD. Traders can also stay up with near-term positioning via our IG Client Sentiment Indicator.

Forex Trading Resources

DailyFX offers a plethora of tools, indicators and resources to help traders. For those looking for trading ideas, our IG Client Sentiment shows the positioning of retail traders with actual live trades and positions. Our trading guides bring our DailyFX Quarterly Forecasts and our Top Trading Opportunities; and our real-time news feed has intra-day interactions from the DailyFX team. And if you’re looking for real-time analysis, our DailyFX Webinars offer numerous sessions each week in which you can see how and why we’re looking at what we’re looking at.

If you’re looking for educational information, our New to FX guide is there to help new(er) traders while our Traits of Successful Traders research is built to help sharpen the skill set by focusing on risk and trade management.

— Written by James Stanley, Strategist for DailyFX.com

Contact and follow James on Twitter: @JStanleyFX

Other Weekly Technical Forecast:

AUD Forecast – AUD/USD, GBP/AUD and AUD/JPY Technical Outlook Bearish

Crude Oil Forecast– Prices Touches New 2019 High As OPEC Supply Doubts Remain

British Pound Forecast – Charts Highlight Bullish GBP Bias

US Dollar Forecast – Dollar Reverses in Large Range, EURUSD Pressure Builds Towards Break

Gold Forecast – XAU/USD Rebound to Fizzle

Euro Forecast –Trend & Resistance Give Euro Weak Backdrop Heading into Next Week



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Crude Oil Price Outlook Bearish, Eyeing January Lows on Long Bets

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Crude Oil Technical Forecast: Bearish

  • Crude oil prices struggled sustaining upside momentum this past week
  • Technical signals on the daily, 4-hour chart hinting at weakness ahead
  • IG Client Sentiment offering stronger bearish crude oil contrarian bias

Build confidence in your own Crude Oil trading strategy with the help of our free guide!

Crude Oil Technical Outlook

Crude oil prices struggled to sustain upside momentum this past week as US recession fears plagued risk trends and the sentiment-linked commodity. From a technical standpoint, this falls in line with oil’s dominant downtrend since the middle of April when the commodity fell through rising support from the end of last year.

Looking at the oil daily chart, gains during the front-end of the past 5 trading days were tamed by a falling channel of resistance going back to the middle of July (parallel red lines below). Horizontal resistance also held at 57.38, former highs from February. This left crude oil sitting just above the lower boundary of psychological support which is a range between 54.55 and 55.41.

If descending resistance continues to define near-term price action in the commodity, we may see crude oil extend weakness down the road. Prices may eventually end up at the next critical psychological area between 50.41 and 52.08. This range held as support on multiple occasions such as in June and back in January. Meanwhile, near-term technical signals also hint towards downtrend resumption.

Crude Oil Daily Chart

Crude Oil Daily Price Chart

Crude Oil Chart Created in TradingView

Zooming in on the crude oil 4-hour chart below, rising support from August 7 was taken out this past week. As such, a close under 54.55 may pave the way for continued declines. Otherwise, the upside challenge for the commodity is taking out descending resistance from the middle of July which would expose the July 31 high at 58.79 down the road.

For more updates on crude oil, including fundamental developments, feel free to follow me on Twitter here @ddubrovskyFX.

Crude Oil 4-Hour Chart

Crude Oil 4-Hour Price Chart

Crude Oil Chart Created in TradingView

Crude Oil Sentiment Outlook – Bearish

Meanwhile, IG Client Positioning is offering a stronger crude oil bearish contrarian trading bias. Traders are further net long on August 16 than compared to the prior day. To learn more about how you can use this in our own trading strategy, join me every week on Wednesday’s at 00:00 GMT as I uncover what market positioning has to say about the prevailing trends in financial markets.

Crude Oil IG Client Positioning

Oil Client Positioning Chart

FX Trading Resources

— Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter



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Into the Jackson Hole Vortex

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Weekly Gold Price Forecast: Into the Jackson Hole Vortex

Traders shouldn’t be surprised if gold prices spend most of the week trading sideways ahead of the Federal Reserve’s Jackson Hole Economic Policy Symposium.

Weekly Gold Price Forecast: Into the Jackson Hole VortexWeekly Gold Price Forecast: Into the Jackson Hole Vortex

Weekly Fundamental Gold Price Forecast: Neutral

  • Gold prices (as well as other precious metals) continue to outperform in an environment defined by falling real sovereign yields – that is, inflation-adjusted yields remain in negative territory.
  • Traders shouldn’t be surprised if gold prices spend most of the week trading sideways ahead of the Federal Reserve’s Jackson Hole Economic Policy Symposium.
  • The IG Client Sentiment Index shows that gold prices in USD-terms (XAUUSD) may give back some of their recent gains in the days ahead.

See our long-term forecasts for Gold and other major currencies with the DailyFX Trading Guides.

Gold Prices Week in Review

Gold prices, no matter how you measure them, had another good week. Not one major currency gained ground against gold, with gold prices in EUR-terms (XAUEUR) leading the way higher with a 2.11% rally. Now, gold prices in EUR-terms (XAUEUR) are quickly approaching the all-time high established in October 2016; for many of the gold-crosses, fresh all-time highs have already been achieved (gold prices in AUD-terms (XAUAUD), gold prices in GBP-terms (XAUGBP), and gold prices in NZD-terms (XAUNZD) come to mind).

But the central focus of most market participants is gold prices in USD-terms (XAUUSD), and that too produced another strong week, adding 1.11%. Gold prices, regardless of the currency basis, have been on a strong run higher in recent weeks in part to the global monetary response to the US-China trade war; we’ll get clarification on the state of global easing this week as central bankers from around the world descend on Jackson Hole, Wyoming for the Federal Reserve’s annual Economic Policy Symposium.

Global Trade War Concerns Keep Gold Prices Elevated

Despite improved trading conditions for global equity markets in recent weeks, not much has changed in a positive manner along the US-led trade war front. Sure, there is a détente in the US-China trade war after the US tariffs at a clip of 10% on $300 billion of imported Chinese goods were pushed back from September 1 to December 15.

Yet there is a strong argument to be made with central banks unveiling more accommodative, dovish policy in recent weeks – a trend that is expected to continue – the fundamental backdrop for gold prices remains bullish in the long-term horizon. Falling sovereign bond yields (particularly German Bunds, UK Gilts, and US Treasuries since the start of May) continue to drop lower, and as a result inflation-adjusted yields remain in negative territory – good news for precious metals.

Volatility Tamped Down Ahead of Fed’s Jackson Hole Meeting

The Fed’s Jackson Hole Economic Policy Symposium this coming week should keep volatility tamped down in the days ahead. Traders typically don’t like to stake out significant positions ahead of the Fed’s annual summit; indeed, at the end of August, many trading desks have been left absent for summer vacation.

Beyond the prospect of an unforeseen development (see: US President Trump’s tweets) in the US-China trade war, the week leading into the Fed’s Jackson Hole Economic Policy Symposium is likely to be a quieter one – even if there are several significant pieces of data set to be released.

Other Top FX Events in Week Ahead

Early in the week, on Tuesday, gold prices in AUD-terms (XAUAUD) will be in focus with the release of the Reserve Bank of Australia’s August meeting minutes. Gold prices in AUD-terms (XAUAUD) are holding near their all-time highs ahead of the minutes. Elsewhere, the commodity currencies will remain in focus with the release of the July Canada inflation report on Wednesday, drawing attention to gold prices in CAD-terms (XAUCAD).

Elsewhere, gold prices in EUR-terms will come into focus with the release of the August Eurozone PMIs, particularly as odds for more easing from the European Central Bank at their September policy meeting have crept higher in recent weeks.

Net-Long Gold Futures Positioning Just Off the Yearly High

Weekly Gold Price Forecast: Into the Jackson Hole Vortex

Finally, looking at positioning, according to the CFTC’s COT for the week ended August 13, speculators decreased their net-long gold futures positions to 290.1K contracts, down slightly from the 292.6K net-long contracts held in the week prior. The market is still the most net-long since September 2016 despite the slight moderation in bullish positioning.

FX TRADING RESOURCES

Whether you are a new or experienced trader, DailyFX has multiple resources available to help you: an indicator for monitoring trader sentiment; quarterly trading forecasts; analytical and educational webinars held daily; trading guides to help you improve trading performance, and even one for those who are new to FX trading.

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher, email him at cvecchio@dailyfx.com

Follow him in the DailyFX Real Time News feed and Twitter at @CVecchioFX



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Dow Jones, DAX 30, FTSE 100, Nasdaq 100 Technical Forecasts

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Dow Jones, DAX 30, FTSE 100, Nasdaq 100 Forecast:

Dow Jones, DAX 30, FTSE 100, Nasdaq 100 Forecasts

Stock volatility has been heightened across the various equity markets as traders continue to come to terms with conflicting fundamental themes and uncertainty. Amidst the volatility, the Dow Jones, DAX 30 and FTSE 100 have slipped beneath their longer-term trendlines from late 2018 whereas the Nasdaq remains narrowly above. In the week ahead, a continuation of Friday’s rally could see the Indices target prior support which will now look to offer resistance. Here are the levels to watch.

Dow Jones Forecast

Technical Outlook: Neutral

The DJIA closed Friday trading slightly beneath a band of resistance and the ascending trendline from late December 2018. If bulls can surmount the area of confluence in the week ahead, subsequent resistance may reside around 26,705 which marks the high from January 2018. On the other hand, bears will look to break the potential trendline posed by the June and August lows. If selling accelerates, June lows around 24,600 could be the final line in the sand before steeper losses.

Dow Jones Price Chart: 4 – Hour Time Frame (May – August) (Chart 1)

DJI Price Chart

Nasdaq 100 Forecast

Technical Outlook: Neutral

Unlike the Dow Jones, the Nasdaq was able to recapture its ascending trendline from December. It will look to provide buoyance – as will the prospective trendline from June and August lows – next week. Topside barriers may exist at 7,670 to 7,720 before the ascending trendline originating from March lows (the dotted red line above August swing highs) can become a factor. The trendline has influenced price throughout the last two quarters, most recently rebuking a move higher on August 13.

Nasdaq 100 Price Chart: 4 – Hour Time Frame (May – August) (Chart 2)

NDX Price Chart

DAX 30 Forecast

Technical Outlook: Bearish

Shifting to the DAX, recent price action has not been kind to the German equity Index. Consequently, it is now well beneath the ascending trendline from December – similar to the line the Dow Jones is within reach of. If bulls return in earnest, however, two horizontal levels at 11,500 and 11,840 will look to stall a rebound before it can test the trendline near 12,200.

Interested in longer-term trades? Check out our Q3 Forecasts for equities, Gold, oil and more.

For support, the DAX is running rather shorthanded. Initial levels to watch are the August bottom – coinciding with lows from March – around 11,268. Should the lows from last week surrender to renewed bearishness, it could open the door to deeper losses down to the 11,000 area where multiple swing-lows from Q1 2018 reside.

DAX 30 Price Chart: Daily Time Frame (March – August) (Chart 3)

DAX Price Chart

FTSE 100 Forecast

Technical Outlook: Bearish

Finally, the FTSE 100 finds itself in a similar situation to the DAX 30. As bulls yield to bears, price has collapsed in August with the Index roughly 600 points lower than its July high. If bears continue to drive the FTSE lower, initial support might reside near the swing lows of March and June around 7,080 – but likely only over short timeframes. Longer-term support could materialize at the psychological 7,000 level before the door is opened to probe subsequent support.

FTSE 100 Price Chart: Daily Time Frame (February – August) (Chart 4)

FTSE 100 Price Chart

Conversely, topside barriers near 7,200 will look to stall rebounds before the Index can look to target August swing-highs around 7,300 and the ascending trendline from December at 7,365. Given that the DAX and FTSE have plunged through multiple support levels in August, it would be presumptuous to assume they have completed their descents without clear cut evidence.

To that end, the technical outlook for two European indices is bearish, while the Dow Jones and Nasdaq 100 lack a clear technical leaning in my view – resulting in a neutral bias. Follow @PeterHanksFX for updates and analysis on these themes as they progress and what it means for equity markets.

–Written by Peter Hanks, Junior Analyst for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

Read more:Will the Stock Market Crash in 2019?

DailyFX forecasts on a variety of currencies such as the US Dollar or the Euro are available from the DailyFX Trading Guides page. If you’re looking to improve your trading approach, check out Traits of Successful Traders. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide.



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