Following the worst session for stocks this month, the morning of April 16 is starting on a more positive note.
The technical situation may still lean pessimistic, however, buyers seem to be defending their bullish view. Not to mention, supportive Central Banks around the globe should not be dismissed too quickly.
The DAX followed it’s expected route yesterday; the price formed a double top formation and broke its neckline, aiming towards the lower line of the wedge. The lower line of the wedge was in the same place as the 38.2% Fibonacci level which activated demand for the stock. The price bounced and is now moving upwards. Pessimists will probably see the price heading towards the creation of the right shoulder of the head and shoulders pattern, fair enough, but for a sell signal, the price will have to break out the 38.2% Fibonacci level.
The EUR/USD also followed its expected course and as we anticipated yesterday, it saw a downswing that came from the breakout of the lower line of the flag. After the breakout, the price tested the line as the closest resistance level which must have pleased price action worshipers. The price is currently testing the lower line of the triangle pattern for the second time in a short period. If the price doesn’t bounce, it can be a hint for a breakout and a sell signal. If buyers want to avoid suffering, they’ll need to protect this support at all costs.
Lastly, let’s take a look at Gold. After a bad day yesterday, when the price was drawing a head and shoulders pattern, sellers failed to break the neckline and the price went higher leading to a positive Thursday. As long as the price stays above the mid-term up trendline, then sentiment is definitely positive.