Early trading this Monday morning has been dominated by President Trump's surprise weekend decision to launch airstrikes on three nuclear sites in Iran, which may increase the potential for a wider conflict in the Middle East.
After closing at 21,652 on Friday, this news led the US 100 to a gap open lower to 21,375 in early Asian trading, however, this drop didn't last long and the index has since recovered to trade back up to 21600 again at the time of writing (0800 BST).
Looking forward, the focus for traders may continue to be on Iran's next move. So far they have confined their retaliation to missile attacks on Israel, but they did issue a statement saying they reserve all options to defend themselves.
Fresh attacks on US bases in the region, or deciding to close the Strait of Hormuz, a vital shipping supply route for Oil and Gas from the region, may undermine risk sentiment which could lead to renewed selling of the US 100, while any options suggesting a potential quicker resolution to this conflict may be seized upon by traders to push the index back up to higher levels seen in the middle of last week.
There are scheduled events released across the week that may also be relevant, these include the testimony of Federal Reserve (Fed) Chairman Jerome Powell to congress at 1500 BST on Tuesday and Wednesday, as well as the next US PCE Index update at 1330 BST on Friday, which is the Fed's preferred inflation gauge.
Technical Update: Assessing Support and Resistance Levels
Escalation of hostilities in the middle east over the weekend may leave traders uncertain as to the direction of the next price activity for the US 100 moving forward.
However, technical analysis can help to outline potential support and resistance levels, which if broken to the up or downside, might offer clues on where the index may move.
Potential Support Levels:
Looking at the chart of the US 100 index below, it could be argued that Monday’s lower opening level has already tested what traders may be viewing as support at 21373. This level is equal to half the May 23rd to June 11th phase of price strength.
Having seen an initial recovery following tests of this 21373 level, it may now have been strengthened as a support focus. This means closing breaks below 21373, while not a guarantee of further price declines, may suggest tests of the next support at 20666, which is the May 23rd price low, even 20360, the 38% Fibonacci retracement level, could be possible.
Potential Resistance Levels:
In terms of resistance levels to monitor this week, as the chart shows, Friday’s activity did see a sell-off from its 21905 session high. This confirms sellers have been active at this level previously and may prove to be again.
As such, traders may now be watching the defence of this 21905 level on a closing basis, as breaks above this resistance may now be required to see attempts to push to higher levels which may include a challenge of resistance at 22074, the June 11th session upside extreme, possibly then 2226, the February 18th high.
The material provided here has not been prepared
accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research, we will not seek to take any advantage before providing it to our clients.
Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
After closing at 21,652 on Friday, this news led the US 100 to a gap open lower to 21,375 in early Asian trading, however, this drop didn't last long and the index has since recovered to trade back up to 21600 again at the time of writing (0800 BST).
Looking forward, the focus for traders may continue to be on Iran's next move. So far they have confined their retaliation to missile attacks on Israel, but they did issue a statement saying they reserve all options to defend themselves.
Fresh attacks on US bases in the region, or deciding to close the Strait of Hormuz, a vital shipping supply route for Oil and Gas from the region, may undermine risk sentiment which could lead to renewed selling of the US 100, while any options suggesting a potential quicker resolution to this conflict may be seized upon by traders to push the index back up to higher levels seen in the middle of last week.
There are scheduled events released across the week that may also be relevant, these include the testimony of Federal Reserve (Fed) Chairman Jerome Powell to congress at 1500 BST on Tuesday and Wednesday, as well as the next US PCE Index update at 1330 BST on Friday, which is the Fed's preferred inflation gauge.
Technical Update: Assessing Support and Resistance Levels
Escalation of hostilities in the middle east over the weekend may leave traders uncertain as to the direction of the next price activity for the US 100 moving forward.
However, technical analysis can help to outline potential support and resistance levels, which if broken to the up or downside, might offer clues on where the index may move.
Potential Support Levels:
Looking at the chart of the US 100 index below, it could be argued that Monday’s lower opening level has already tested what traders may be viewing as support at 21373. This level is equal to half the May 23rd to June 11th phase of price strength.
Having seen an initial recovery following tests of this 21373 level, it may now have been strengthened as a support focus. This means closing breaks below 21373, while not a guarantee of further price declines, may suggest tests of the next support at 20666, which is the May 23rd price low, even 20360, the 38% Fibonacci retracement level, could be possible.
Potential Resistance Levels:
In terms of resistance levels to monitor this week, as the chart shows, Friday’s activity did see a sell-off from its 21905 session high. This confirms sellers have been active at this level previously and may prove to be again.
As such, traders may now be watching the defence of this 21905 level on a closing basis, as breaks above this resistance may now be required to see attempts to push to higher levels which may include a challenge of resistance at 22074, the June 11th session upside extreme, possibly then 2226, the February 18th high.
The material provided here has not been prepared
accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research, we will not seek to take any advantage before providing it to our clients.
Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
Global risk Warning CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading in CFDs. You should consider whether you understand how CFD
免責聲明
這些資訊和出版物並不意味著也不構成TradingView提供或認可的金融、投資、交易或其他類型的意見或建議。請在使用條款閱讀更多資訊。
Global risk Warning CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading in CFDs. You should consider whether you understand how CFD
免責聲明
這些資訊和出版物並不意味著也不構成TradingView提供或認可的金融、投資、交易或其他類型的意見或建議。請在使用條款閱讀更多資訊。