USD/CAD Exchange Rate Prediction – The Dollar Fails to Rally Despite Rising Treasury Yields

The dollar attempted to move higher against the Loonie on Friday but was met with resistance. Despite higher U.S. Treasury yields, the greenback was unable to gain traction. The yield differential is moving in favor of the U.S. currency, but it has difficulty making headway. During the week, the U.S. data was mixed. Despite softer than expected PMI and Jobless claim data released on Thursday, the Fed’s message that they will begin to taper bond purchases by the end of the year. The market is now pricing in a 25-basis point hike by September of 2022 and a 50% chance of a second hike by December 2022. Higher yields will help buoy the dollar, which should eventually weigh on the yellow metal.

Technical Analysis

The dollar eased against the Loonie and was unable to gain traction following the Fed Decision. The exchange rate was unable to recapture resistant near the 10-day moving average at 1.2711 and is poised to test targets support near the 50-day moving average at 1.2615. The exchange moved from the overbought territory as the fast stochastic generated a crossover sell signal. Medium-term momentum has turned negative the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in negative territory with a rising trajectory which points to a higher exchange rate.

Silver Price Prediction – Prices Form Doji Day which is a Sign of Indecision

Silver moved sideways on Friday, forming a doji day despite a stable dollar and rising yields. The greenback was able to gain traction as yields surged higher in the wake of the Fed’s commentary. The U.S. data was mixed. Despite softer than expected PMI and Jobless claim data released on Thursday, the Fed’s message that they will begin to taper bond purchases by the end of the year. The market is now pricing in a 25-basis point hike by September of 2022 and a 50% chance of a second hike by December 2022. Higher yields will help buoy the dollar, which should eventually weigh on the yellow metal.

[fx-broker slug=fxtm]

Technical analysis

Silver prices formed a doji day following an inside day which is a sign of indecision. Prices are poised to test resistance near the 10-day moving average at $22.91. Target support is seen near the September lows at 22.03. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. The medium-term positive rate is decelerating as the MACD (moving average convergence divergence) histogram is printing in positive territory with a declining trajectory which points to consolidation. The relative strength rebounded and then moved lower after testing the oversold trigger level of 30.

Natural Gas Price Prediction – Prices Rally on Warm Weather Forecast

Natural gas prices rallied sharply, rising more than 3.2% and demand continues to outstrip supply. The weather is expected to remain warmer than average throughout most of the United States during the next two weeks. Warm weather should increase cooling demand during a period when the weather is expected to become milder. Tropical storm Sam has formed in the Atlantic but its unlikely to impact any natural gas infrastructure.

Technical Analysis

Natural gas prices surged, rising 3.2%, closing above resistance that is now support near the 10-day moving average at 5.09. Additional support is seen near the 50-day moving average at 4.33. Resistance is seen near the September highs at $5.65. Short-term momentum has turned positive as the fast stochastic recently generated a crossover buy signal. Medium-term negative momentum is decelerating as the MACD histogram is printing in negative territory with a rising trajectory which points to consolidation.

The EIA sees More Demand

The EIA reports that the industrial sector of natural gas consumption will rise throughout 2021 and exceed pre-pandemic 2019 levels. They forecast that growth to continue into 2022, and natural gas delivered to industrial consumers will average 23.8 billion cubic feet per day that year. If realized, this amount would be near the current record high for annual industrial natural gas consumption set in the early 1970s

Gold Price Prediction – Prices Rebound Slightly Despite Rising Yields

Gold prices moved higher on Friday, despite a stable dollar and rising yields. The greenback was able to gain traction as yields surged higher in the wake of the Fed’s commentary. Despite softer than expected PMI and Jobless claims data released on Thursday, the Fed’s message that they will begin to taper bond purchases by the end of the year. The market is now pricing in a 25-basis point hike by September of 2022, and a 50% chance of a second hike by December 2022. Higher yields will help buoy the dollar which should eventually weigh on the yellow metal.

[fx-broker slug=fxtm]

Technical analysis

Gold prices rebounded slightly but the bear flag pattern is in place. This pattern is a continuation event that pauses before it refreshes lower. Prices remained below resistance seen near the 10-day moving average, at 1,770. Target support is seen near the August lows at 1,677. The 10-day moving average has crossed below the 50-day moving average, which means that a short-term downtrend is now in place. Short-term momentum has reversed and turned negative as the fast stochastic generated a crossover sell signal.

Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover signal. This sell signal occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in negative territory with a downward sloping trajectory which points to lower prices.

USD/CAD Exchange Rate Prediction – The Dollar Drops on Soft Claims Data

 

The dollar eased as U.S. Treasury yields declined in the wake of the softer than expected Jobless Claims. The Fed also kept monetary policy unchanged and said if the recovery in the United States continued to remain on track, they would consider removing some accommodation. Additionally, the PMI composite reported by IHS Market showed weaker than expected manufacturing and services.

Technical Analysis

The dollar eased against the Loonie for a second consecutive trading session following the Fed Decision. The exchange rate sliced through support which is now resistant near the 10-day moving average at 1.2713 and is poised to test targets support near the 50-day moving average at 1.2613. The exchange moved from the overbought territory as the fast stochastic generated a crossover sell signal. Medium-term momentum has turned negative the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in negative territory with a rising trajectory which points to a higher exchange rate.

Jobless Claims Rise More than Expected

Initial claims for the week ended September 18 totaled 351,000, an increase from the previous week’s upwardly revised 335,000 and above expectations of 320,000. The total was the highest since the week of August 21. Continuing claims data, which runs a week behind, also increased, rising 181,000 to total more than 2.84 million.

Silver Price Prediction – Prices Edge Higher on Soft PMI Data

Silver prices edged higher, forming in inside day, which is a sign of indecision. The selloff in the greenback did not help the silver prices gain traction. U.S. Yields moved lower in the wake of the Fed’s monetary policy decision on Wednesday and softer than expected Jobless claims were released by the Labor Department on Thursday.  PMI data released by IHS Markit showed a pullback in September in Manufacturing and Services.

[fx-broker slug=fxtm]

Technical analysis

Silver prices edged but formed an inside day. Prices are poised to test resistance near the 10-day moving average at $23.06. Target support is seen near the September lows at 22.03. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term positive momentum is decelerating as the MACD (moving average convergence divergence) histogram is printing in positive territory with a declining trajectory which points to consolidation.

The first look at national PMI data from IHS Markit was reported on Thursday. The September manufacturing PMI came in at 60.5, a 5-month low versus 55.1 reported in August. The services PMI also dropped, hitting a 14-month low at 54.44 versus 55.1 in August. The total September composite PMI was 54.5, which was a 1-year low versus 55.4 in August.

Natural Gas Price Prediction – Prices Surge on Inventory Build

Natural gas prices rallied sharply rising more than 3% following a smaller than expected build in natural gas inventories. Expectations had been for an 83 Bcf build in stockpiles according to survey provider Estimize. The weather is expected to remain warmer than average throughout most of the United States during the next two weeks. Warm weather should increase cooling demand during a period when the weather is expected to become milder. Tropical storm Sam has formed in the Atlantic but its unlikely to impact any natural gas infrastructure.

Technical Analysis

Natural gas prices surged rising 3.3% and poised to test resistance is seen near the 10-day moving average at 5.09. Support is seen near the 50-day moving average at 4.30. Short-term momentum has turned positive as the fast stochastic recently generated a crossover buy signal. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line. The MACD histogram is printing in negative territory with a downward sloping trajectory which points to lower prices.

Inventories Rise Less than Expected

Natural gas in storage was 3,082 Bcf as of Friday, September 17, 2021, according to the EIA. This represents a net increase of 76 Bcf from the previous week. Stocks were 589 Bcf less than last year at this time and 229 Bcf below the five-year average of 3,311 Bcf. At 3,082 Bcf, total working gas is within the five-year historical range.

Gold Price Prediction – Prices Fall Following Bear Flag Pattern Despite Drop in the Greenback

Gold prices moved lower after rising for 3-consecutive sessions and gave back all of last week’s gains. The selloff in the greenback did not help the yellow metal gain traction. U.S. Yields moved lower in the wake of the Fed’s monetary policy decision on Wednesday and softer than expected Jobless claims were released by the Labor Department on Thursday.

[fx-broker slug=fxtm]

Technical analysis

Gold prices fell and could not escape the bear flag pattern. This pattern is a continuation event that pauses before it refreshes lower. Prices remained below resistance seen near the 10-day moving average, at 1,774. Target support is seen near the August lows at 1,677. The 10-day moving average has crossed below the 50-day moving average, which means that a short-term downtrend is now in place. Short-term momentum has reversed and turned negative as the fast stochastic generated a crossover sell signal.

Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover signal. This sell signal occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in negative territory with a downward sloping trajectory which points to lower prices.

Jobless Claims Rise

Initial claims for the week ended September 18 totaled 351,000, an increase from the previous week’s upwardly revised 335,000 and above expectations of 320,000. The total was the highest since the week of August 21. Continuing claims data, which runs a week behind, also increased, rising 181,000 to total more than 2.84 million.

Silver Price Prediction – Prices Rise Following Fed Decision

Silver prices surged higher in the wake of the Fed decision as the dollar eased and U.S. yields continued to grind downward. The Fed kept interest rates on hold, which put pressure on the greenback. The Fed also said if the recovery in the United States continued to remain on track, they would consider removing some accommodation. The risk-off trade took as stocks rallied for a second consecutive trading session, allowing silver prices to gain traction as the dollar finally eased.  Gold prices rebounded for a third straight trading session allowing silver prices to gain a toe hold.

[fx-broker slug=fxtm]

Technical analysis

Silver prices surged higher, poised to test resistance near the 10-day moving average at $23.23 Target support is seen near the September lows at 22.03. Short-term momentum has reversed and turned positive as the fast stochastic generated a crossover buy signal. Prices are oversold as the fast stochastic is printing a reading of 36, below the oversold trigger level of 18, which reflects accelerating positive momentum.

Housing Sales Fell

According to the National Association of Realtors, sales of previously owned dropped by 2% in August to an annualized rate of 5.88 million units. Sales were 1.5% lower than August 2020 for the first annual decline in 14 months. The supply of homes for sale fell 1.5% month to month to 1.29 million at the end of August. Compared with August 2020, inventory is down 13. At the current sales pace there was a 2.6-month supply. Tight supply pushed the median price of an existing home sold in August to $356,700, an increase of 14.9% from August of 2020.

USD/CAD Exchange Rate Prediction – The Dollar Slides After Fed Decision

The dollar eased as the Fed kept interest rates on hold, which put pressure on the greenback. The Fed also said if the recovery in the United States continued to remain on track, they would consider removing some accommodation. Market pundits seem to believe that the Fed will begin its tapering of bond purchases in either November or December of 2021.

Technical Analysis

The dollar eased against the Loonie following the Fed Decision. The exchange rate hit resistance near an upward sloping trend line that comes in near 1.2910. Support on the exchange rate is seen near the 10-day moving average at 1.2710 and the 50-day moving average at 1.2607. The exchange moved from the overbought territory as the fast stochastic generated a crossover sell signal. Medium-term momentum is positive as the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in negative territory with a rising trajectory which points to a higher exchange rate.

The Fed Sees Growth Slowing

The committee now sees GDP rising just 5.9% this year, compared to a 7% forecast in June. However, 2023 growth is now set at 3.8%, compared to 3.3% previously, and 2.5% in 2023, up one-tenth of a percentage point. Projections also indicated FOMC members see inflation stronger than indicated in June. Core inflation is projected to increase 3.7% this year, compared to the 3% forecast the last time members indicated their expectations. Officials then see inflation at 2.3% in 2022, compared to the previous projection of 2.1%, and 2.2% in 2023, one-tenth of a percentage point higher than the June forecast.

Natural Gas Price Prediction – Prices Gain Foothold Ahead of Inventory Report

Natural gas prices found a foothold on Wednesday ahead of Thursday’s inventory report after, falling for the 4-consecutive trading days. Expectations are for a 83 Bcf build in stockpiles according to suvey provider Estimize. This build follows last weeks larger than expected build in natural gas inventories. The weather is expected to remain warmer than average throughout most of the United States during the next two weeks. Warm weather should increase cooling demand during a period when the weather is expected to become milder. There are 4-storms in the Atlantic; the two named storms, Peter and Rose, are expected to stay well away from the continental United States. According to the most recent forecast from NOAA, the other storms have a less than 60% chance of becoming tropical cyclones during the next 48-hours.

Technical Analysis

On Wednesday, natural gas prices found support ahead of the 50-day moving average at 4.27. Resistance is seen near the 10-day moving average at 5.09. Short-term momentum has turned negative as the fast stochastic recently generated a crossover sell signal. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line. The MACD histogram is printing in negative territory with a downward sloping trajectory which points to lower prices.

Gold Price Prediction – Prices Rebound as Dollar Slips

Gold prices bounced for a third consecutive trading session. The selloff in the greenback helped provide tailwinds for gold prices. U.S. Yields were mixed U.S. Treasury bonds continued to attract traders. U.S. home sales declined in line with expectations. According to the National Association of Realtors, sales of previously owned dropped by 2% in August to an annualized rate of 5.88 million units. Sales were 1.5% lower than August 2020 for the first annual decline in 14 months.

[fx-broker slug=fxtm]

Technical analysis

Gold prices rebounded but continue to form a bear flag pattern. This pattern is a continuation event that pauses before it refreshes lower. Prices remained below resistance seen near the 10-day moving average, at 1,790. Target support is seen near the August lows at 1,677. The 10-day moving average has crossed below the 50-day moving average, which means that a short-term downtrend is now in place. Short-term momentum has reversed and turned positive as the fast stochastic generated a crossover buy signal.

Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover signal. This sell signal occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in negative territory with a downward sloping trajectory which points to lower prices.

USD/CAD Exchange Rate Prediction – The Dollar Eases Despite Robust Housing Data

The dollar eased as riskier assets gained traction. On Monday, Canadians went to the polls and re-elected  Prime Minister Trudeau for a 3rd consecutive PM tenor. U.S. yields moved south for a second straight trading session despite a stronger than expected U.S. Housing Starts report. The debt ceiling will likely keep the dollar buoyed as riskier assets remain under pressure for the balance of September.

Technical Analysis

The dollar eased against the Loonie on turnaround Tuesday. The exchange rate hit resistance near an upward sloping trend line that comes in near 1.2910, on Monday and that still remains a target. Support on the exchange rate is seen near the 10-day moving average at 1.2705 and the 50-day moving average at 1.2607. The exchange moved from the overbought territory as the fast stochastic generated a crossover sell signal. Medium-term momentum is positive as the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in negative territory with a rising trajectory which points to a higher exchange rate.

U.S. Home Building Accelerates

U.S. Homebuilding accelerated more than expected in August, likely boosted by declining lumber prices. According to the U.S. Commerce Department, Housing starts advanced 3.9% to an annual rate of 1.615 million units in August. Expectations had been for housing starts rebounding to a rate of 1.555 million units. The prior month’s housing data for July was revised up to a rate of 1.554 million units from the previously reported 1.534 million units.

Silver Price Prediction – Prices Rebound as the Dollar Eases

Silver prices rebounding off support levels as the dollar eased and U.S. yields continued to gring downward. The risk-off trade took a breather on turn-around Tuesday, allowing silver prices to gain traction as the dollar finally eased.  Gold prices rebounded for a second straight trading session allowing silver prices to gain a toe hold. Prices were oversold, and the technicals point to a relief rally. Housing starts advanced 3.9% to an annual rate of 1.615 million units last month, the Commerce Department said on Tuesday.

[fx-broker slug=fxtm]

Technical analysis

Silver prices rebounded from key support levels seen near the August and December lows at 21.95. If prices are able to close above this level for consecutive days it will likely generate a bounce from an oversold condition. Prices remained below resistance seen near the 10-day moving average, at 23.33. Target support is seen near the August lows at 22.10. Short-term momentum has reversed and turned positive as the fast stochastic generated a crossover buy signal. Prices are oversold as the fast stochastic is printing a reading of 18, below the oversold trigger level of 20, which could foreshadow a correction.

Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover signal. This sell signal occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in negative territory with a downward sloping trajectory which points to lower prices.

Natural Gas Price Prediction – Prices Fall as Momentum Turns Negative

Natural gas prices continue to trend lower on Tuesday, falling for the 4th consecutive trading day. The technicals look negative as negative momentum is accelerating. The decline comes despite warmer than expected weather forecasts throughout most of the United States during the next two weeks. Warm weather should increase cooling demand during a period when the weather is expected to become milder. There are 4-storms in the Atlantic; the two named storms, Peter and Rose, are expected to stay well away from the continental United States. According to the most recent forecast from NOAA, the other storms have a less than 60% chance of becoming tropical cyclones during the next 48-hours.

Technical Analysis

On Tuesday, natural gas prices dropped 3.8%% and is poised to test support seen near the 50-day moving average at 4.25. Resistance is seen near the 10-day moving average at 4.25. Short-term momentum has turned negative as the fast stochastic recently generated a crossover sell signal. Medium-term positive has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line. The MACD histogram is printing in negative territory with a downward sloping trajectory which points to lower prices.

Gold Price Prediction – Prices Rebound From Oversold Territory as the Dollar Weakens

Gold prices bounced for a second consecutive trading session. The rally in the dollar stalled helping provide tailwinds for gold prices. U.S. Yields moved lower as the safety of U.S. Treasury bonds continued to attract traders. U.S. Housing Starts increased more than expected in August, as materials such as lumber declined.

[fx-broker slug=fxtm]

Technical analysis

Gold prices rebounded but continue to form a bear flag pattern. This pattern is a continuation event that pauses before it refreshes lower. Prices remained below resistance seen near the 10-day moving average, at 1,780. Target support is seen near the August lows at 1,677. The 10-day moving average has crossed below the 50-day moving average, which means that a short-term downtrend is now in place. Short-term momentum has reversed and turned positive as the fast stochastic generated a crossover buy signal. Prices have moved from oversold territory into neutral territory which is a sign of accelerating positive momentum.

Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover signal. This sell signal occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in negative territory with a downward sloping trajectory which points to lower prices.

USD/CAD Exchange Rate Prediction – The Dollar Rise on Risk-off Trade

 

The dollar surged higher and hit key resistance levels as Canada went to the polls on Monday.  Riskier assets headed south which has benefited the greenback as a safe-haven currency. Prime Minister Trudeau and his Conservative challenger O’Toole appear to be running neck and neck.

Technical Analysis

The dollar moved higher against the Loonie, as the safe-haven lure of the greenback pushed the U.S. currency higher against most major currencies. The exchange rate hit resistance near an upward sloping trend line that comes in near 1.2910. Support on the exchange rate is seen near the 10-day moving average at 1.2690 and the 50-day moving average at 1.2600. The exchange rate is overbought as the fast stochastic is printing a reading of 81, above the overbought trigger level of 80, which could foreshadow a correction. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum is positive as the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in negative territory with a rising trajectory which points to a higher exchange rate.

The Debt Ceiling Generates Risk

Congress has been stalling any movement related to future spending despite urging from Treasury Secretary Yellen to act.  There are rumors that The House of Representation may take up a stop-gap measure to extend expenditures, but this attempted will have difficulty in the Senate.

Silver Price Prediction – Prices Test Key Support as Prices are Oversold

Silver prices moved lower but bounced off key support levels despite a rally in the dollar. The rise of the greenback on Monday generated headwinds for silver prices as risk-off speed accelerates. U.S. Yields moved. Gold prices have failed to become the security of choice during a risk-off period, edged slightly higher, which helped buoy silver.

[fx-broker slug=fxtm]

Technical analysis

Silver prices continued to trend lower but held key support levels seen near the August and December lows at 21.95. If prices are able to close above this level for consecutive days it will likely generate a bounce Prices remained below resistance seen near the 10-day moving average, at 23.51. Target support is seen near the August lows at 22.10. Short-term momentum has reversed and turned positive as the fast stochastic generated a crossover buy signal. Prices are oversold as the fast stochastic is printing a reading of 9, below the oversold trigger level of 20, which could foreshadow a correction.

Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover signal. This sell signal occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in negative territory with a downward sloping trajectory which points to lower prices.

Debt Ceiling is not Under Control

The risk-off trade accelerated, continuing the trend experienced at the end of last week.  Congress has been stalling despite urging from Treasury Secretary Yellen to act.  There are rumors that The House of Representation may take up a stop-gap measure to extend spending, but this attempted will have difficulty in the Senate.

Natural Gas Price Prediction – Prices Slide Through Support as Supply Increases

Natural gas prices moved lower on Monday as fear of tropical storm activity abated.  The weather is expected to be warmer than normal over the next 6-10 days, but then becomes milder, according to a forecast from the National Oceanic Atmospheric Administration. The most recent report from the EIA showed a larger than expected build in natural gas inventories, but stocks remain well below the 5-year average. U.S. Supply increased in the latest week.

Technical Analysis

On Monday, natural gas prices dropped sharply, falling 2.75% and gapping lower through key support, which is now resistant near the 10-day moving average at 5.08. Support is seen near the 50-day moving average at 4.23. Short-term momentum has turned negative as the fast stochastic recently generated a crossover sell signal. Medium-term positive momentum is decelerating as the MACD (moving average converge divergence) histogram is printing in negative territory with a declining trajectory which points to consolidation.

Supply Increases

U.S. supply increases as production begins to come back online in the Gulf of Mexico. According to data from the EIA, the average total supply of natural gas rose by 1.7% compared with the previous report week. Dry natural gas production grew by 1.4%, or 1.3 Bcf per day, compared with the previous report week. According to daily reports from BSEE, on a weekly basis, natural gas production outages in the Federal Offshore Gulf of Mexico decreased by about 0.6 Bcf per day this report week compared with the last report.

Gold Price Prediction – Prices Experience Dead-Cat Bounce

Gold prices traded sideways and continued to experience a dead-cat bounce. The upward momentum was drained by the selloff last week. The rally in the dollar on Monday generated headwinds for gold prices as risk-off speed accelerates. U.S. Yields moved lower as the safety of U.S. treasury bonds lured traders. Gold prices have failed to become the security of choice during a risk-off period. The U.S. debt ceiling is approaching, which means that Congress needs to extend spending, or the government will shut down.

[fx-broker slug=fxtm]

Technical analysis

Gold prices consolidated and continue to form a bear flag pattern. This scenario is a continuation pattern that pauses before it refreshes lower. Generally, the recovery from a sharp selloff is muted forming a dead-cat bounce before prices start to move lower again. Prices remained below resistance seen near the 10-day moving average, at 1,782. Target support is seen near the August lows at 1,677. The 10-day moving average has crossed below the 50-day moving average, which means that a short-term downtrend is now in place. Short-term momentum has reversed and turned positive as the fast stochastic generated a crossover buy signal. Prices are oversold as the fast stochastic is printing a reading of 17, below the oversold trigger level of 20, which could foreshadow a correction.

Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover signal. This sell signal occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in negative territory with a downward sloping trajectory which points to lower prices.