SPI Futures and AUD/JPY Analysis: Market Sentiment and Technical Indicators Point to Further Downside
In the ever-changing landscape of financial markets, two key players have recently come under pressure due to economic sensitivity and shifts in investor risk appetite. The SPI futures and AUD/JPY are both feeling the heat as fears of a U.S. recession collide with stretched asset valuations, leading to a significant pullback from previous highs.
Key Points:
– SPI futures have broken a crucial support level and are now eyeing further downside if 7796 gives way.
– AUD/JPY is testing the March 4 low, with a break below 91.86 potentially opening the door for a move towards 90.27.
– RSI signals oversold conditions for both instruments, indicating a potential countertrend squeeze.
SPI Futures: A Bearish Scenario Unfolds
The ASX 200 SPI futures have faced a bearish onslaught, breaking through the October 2022 uptrend with ease after breaching the 200-day moving average earlier. Attempts to reclaim the uptrend have been swiftly rejected, leading to a sharp decline that started overnight and has continued into the current trading session.
Technical Analysis:
– The price is now caught between minor support levels at 7860 and 7796, with the latter representing a significant level before 7600.
– Both RSI and MACD are flashing bearish signals, but with RSI in oversold territory on the daily timeframe, the potential for a squeeze is increasing.
– Traders should watch for a sustained push below 7796 as a signal to sell, targeting a move towards 7600. A stop-loss above 7796 can help protect against a reversal.
– In case 7796 holds, look for a bottoming signal on shorter timeframes to establish long positions, targeting Monday’s low of 7925 as a possible exit point.
AUD/JPY: Testing Key Support Levels
The AUD/JPY pair is currently testing the March 4 low of 91.86, indicating a continued downtrend that started after sellers rejected the price at 94.65. Despite RSI being in oversold territory, both RSI and MACD remain bearish, suggesting caution before taking any positions.
Technical Analysis:
– A sustained break below 91.86 could lead to further downside, with a potential target at 90.27.
– Alternatively, if 91.86 holds, traders may consider establishing long positions above this level, with a stop-loss below for protection. Resistance may be encountered at 93.40, with 94.65 as a more significant target.
– It’s essential to wait for clear bottoming signals before making any trading decisions in the current market environment.
In conclusion, both SPI futures and AUD/JPY are facing downward pressure, with technical indicators pointing towards a potential countertrend squeeze. Traders should remain vigilant and watch for reversal signals to guide their trading decisions in these volatile markets.
Sources:
– SPI futures analysis: TradingView
– AUD/JPY analysis: TradingView
For more insights on the current market conditions, visit the original post [here].