Summary:

• Nikkei (JAP225) eyes a break out of the consolidation range

• EURUSD overcomes the lower bound of the triangle pattern

• COPPER struggles to find the bottom

The US equity indices continue to advance towards the all-time-highs. Meanwhile, the Japanese Nikkei (JAP225) keeps trading within the consolidation range started in a spring of this year. The trading range has narrowed as of late and the benchmark is trading close to the relevant resistance level at 23000 pts. Moreover, the 50- and 200-period moving averages are approaching and we may witness a stronger impulse in the nearby future. The first signal hinting a possible return of market bulls could be a break of the downward line drawn along the highs from May, June and July. Nevertheless, the psychological 23000 pts handle remains crucial for this equity index. A continued move higher on USDJPY could be beneficial for this benchmark but the latest hesitation of the US dollar as well as improved wage growth in Japan (which may warrant a hawkish response from Bank of Japan) pose a threat for such scenario.

Could the upcoming weeks reward investors in Japan? Source: xStation5

EURUSD may be moving closer to an impulse move as well. The main currency pair has once again moved close to the 1.15 handle. Additionally, we have witnessed a possible break lower from the triangle pattern. Triangle is normally understood as a continuation pattern so technically this 2-month consolidation could be just a break in a downward trend. Having said that, we may see that the 1.15 level still plays an important support role and may provide the last chance for the EURUSD bulls to act.  

EURUSD has broken lower from the triangle pattern but the pair managed to bounce back to the lower limit of the mentioned formation since then. Will USD bulls have enough power to give it another try? Source: xStation5

On the commodity market COPPER looks especially interesting. The industrial metal managed to halt latest decline in the vicinity of the Fibonacci node of 50% and 161.8% retracement levels. Moreover, the psychological $6000 area is additionally strengthened by local highs from early-2017. A pullback on the USD market could be beneficial for the commodity market as a whole. Moreover, the emerging markets have regained some of their shine lately and it should be noted that these economies are more dependant on the industrial metals. Taking a look at this market from the short-term perspective one can see that bulls are trying to defend the latest swing level and paint a higher low. If they manage to do so an outlook for this market in the upcoming weeks improves.

Stronger USD as well as risks associated with China exert pressure on the industrial metals prices. However, from the technical point of view, the upcoming weeks may bring attempt to move prices higher. Source: xStation5