Risk aversion is back as the dominate theme while Yen surges broadly today. However, Australian Dollar is surprisingly resistent as and it’s following Yen as the second strongest. Canadian is trading as the weakest one as WTI crude oil dives after larger than expected increase in oil inventories. Dollar is trading mixed for the day. Gold drops to as low as 1175.74 so far and looks set to take out 1172.06 fibonacci level with ease.
At the time of writing, DOW is down -0.78%, S&P 500 down -0.84%, NASDAQ down -1.28%. NASDAQ is clearly affected by the poor earnings recent of Chinese tech giant Tencent. As noted before, DOW’s strong break of 25120.07 is a strong signal of near term reversal. Focus will now be on whether it can draw support on 55 day EMA (now at 25033.) Or DOW would just go straight to channel support (now at 24412).
European indices also suffered steep selloff today. DAX closed down -1.58%, CAC down -1.82% and FTSE down -1.49%. CAC’s strong break of 5342.29 support confirms completion of corrective rebound from 5242.64, at 5539.41. Further decline should now be seen through 5242.64 to 100% projection of 5657.44 to 5246.24 from 5539.41 at 5124.62. But, the real test is in 5038.12 key support level.
