Summary:

• S&P500 (US500) revisits the 2800 level
• Wheat hits the key resistance
• NZDUSD in a triangle

We start our weekly analysis of the Top3 charts from the US500 as Wall Street is in focus amid mixed quarterly reports. We can see that US500 managed to break an upper limit of a triangle formation (greatly helped by the Trump-Juncker post meeting sentiment) but then reversed towards this limit in a dynamic fashion. This is a strong levels as we saw it being tested in February, March and June this year. Therefore this present test is important. Taking a broader view, the US500 remains in a bull market being well above the trend line and moving averages. Also the triangle is a continuation pattern so a pullback after a breakout is technically treated as a pause in a rally. For such scenario to hold we obviously need this support to work, otherwise the outlook gets complicated.

US500 is still in a bull mode but the 2800 needs to be defended this week. Source: xStation5 

Wheat is the market to watch in the commodities sector as drought in Europe lifted prices in the US as well. We can see the $550-560 resistance zone as relevant – we had 2017 highs there and it was tested twice in the first half of this year. Therefore it’s normally treated as a possible point of reversal although bear in mind that a sequence of higher lows/highs this year underpins this bull market and technically increases odds of a breakout. Grains have been influenced by the Trade Wars skirmishes so far this year but wheat is not as much exposed as soybean.

Wheat is approaching the $550/60 zone for the 4th time in 2 years – can the bulls make it this time? Source: xStation5 

NZDUSD is the pair to watch in the FX spectrum. NZD has been under pressure lately and the pair has failed to recover even as the overall sentiment improved. Technically we are in a triangle pattern and since this is a continuation formation a return to a downward trend could be assumed. However, bear in mind that this is also a low point of a longer term range plus the NZD is the most oversold currency among the majors tracked by the CFTC. That could offer a chance for a rebound but bulls need to crack the 0.6860 barrier to make it happen. Either way we could see a trigger overnight when the labour market report is published in New Zealand.   

NZDUSD is in a triangle pattern with the 0.6860 being the first barrier for the buyers. Source: xStation5