- US small caps (US200) struggle in the vicinity of 200-session moving average
- GBPUSD climbs back to the resistance zone ranging around 1.32
- Oil price pulls back to the $64 area
Browsing through the major stock market indices it may be wise to take a moment and analyze Russell 2000 (US2000) - the Wall Street small-cap index. The benchmark surged over 27% during the past two months. However, price moved close to the 200-session moving average and this technical obstacle may be the first hurdle for buyers. Nevertheless, as the momentum of the latest upward move was really strong there is a chance for bulls to extend recovery even in spite of the bearish signal painted by the yesterday’s candlestick. In case the aforementioned moving average is broken, buyers may focus on the 1645 pts handle that is marked by the 78.6% Fibo level of the slump started in June 2018.
There is one currency on the FX market that has been attracting significant attention for sometime and it is, of course, the British pound. Theresa May is expected to rule out possibility of a no-deal Brexit during today’s appearances in the UK parliament. It should be note that just a month or two ago the UK Prime Minister strongly denied giving such guarantees and shift in her attitude caused GBPUSD to revisit 1.32 handle where the resistance zone can be found. As chances of delaying Brexit rise pound may be set to gain some grounds in the nearby future. A break above the aforementioned zone could pave the way towards the 1.36 handle as suggested by the range of the previous upward move. Over the short term, however, bulls should keep on guard as close vicinity of the resistance zone may encourage some market participants to “sell facts” in case a negative headline surfaces.
Significant price swings were also spotted on the oil market at the beginning of a new week. Yesterday’s tweet from Donald Trump caused both, Brent (OIL) and WTI (OIL.WTI), prices to move around $2 lower. Further Saudi Arabia efforts to curb output should have positive impact on oil prices over the medium term. This may allow price to realize the textbook range of the inverted head and shoulders pattern that was painted on the daily chart at the turn of 2018 and 2019. Yesterday's sell-off, despite its momentum, could be see as just a corrective pullback towards the recently broken resistance level (neckline and $63-64 area). Bulls seem to remain in favourable position as long as this area holds firm.