On the daily chart below, we can see that the broken trendline is acting as a strong support for the buyers, but the sellers keep leaning on the red long period moving average targeting a breakout. The market is getting nervous amid the stress in the banking sector and emergency actions taken by the central banks.
Tonight the Fed took another emergency action expanding the provision of US Dollars to other major central banks via swap lines to enhance liquidity. This was taken as another sign that things may be worse than it seems and the market went into risk off during the APAC session.
In the 4 hour chart below, we can see that the buyers couldn’t break above the trendline, and folded near it as sellers stepped in between the 61.8% Fibonacci retracement level and the trendline.
There’s a strong selling pressure at the moment and the sellers may be positioning again for a breakout of the broken trendline support. The buyers may be cautious trading into the FOMC meeting this week, so the sellers are likely to remain in control.
In the 1 hour chart below, we can see that the price fell back into the range that was created near the broken trendline. This is a sign of uncertainty. The moving averages have now crossed to the downside, so the momentum is in favour of the sellers.
If we get a pullback, the sellers may lean on the minor trendline which will have confluence with the moving averages acting as resistance. The buyers will need to break above the trendline and the resistance zone at 3975 to start finding some conviction for another rally.