Home Forex Chart Art: Trend Correction Setups on S&P 500 Index and AUD/JPY

Chart Art: Trend Correction Setups on S&P 500 Index and AUD/JPY

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Want to participate in the latest risk rally?

There are some trend correction opportunities to watch!

Check out these support zones during testing.

AUD/JPY Hourly Chart

The pair has been cruising higher within the ascending channel since mid-month!

Another test of support is in the works, which could determine whether the trend continues.

With the 100 SMA above the 200 SMA, technical indicators point to a continuation of the uptrend. Additionally, the 200 SMA’s dynamic inflection point adds additional support at the bottom of the channel.

The Stochastic has already risen to show that buyers are back in the game while sellers are taking a break. Oscillator has plenty of room to head north before hitting overbought territory!

In that case, AUD/JPY may be targeting the top of the channel around the minor psychological mark at 96.50.

Caution is warranted as the gap between the moving averages has narrowed, reflecting the deceleration of bullish pressure. If you plan to go long, we recommend setting these stops below the recent lows.

S&P 500 Index (SPX500) 4 Hour Chart

S&P 500 Index (SPX500) 4 Hour Chart

Haha! This stock index seems to reverse from the slide!

The S&P 500 has broken above the neckline of the double bottom pattern on the 4-time frame and is quickly pulling back to retest.

Will the previous resistance hold as support?

The broken neckline coincides with the 50% Fibonacci retracement level and the dynamic support of the 200 SMA, which seems to hold back losses for now.

A larger correction could reach a dynamic inflection point of 61.8% Fib and 100 SMA near 3,730. This fast-moving SMA is approaching the 200 SMA, so it could be gearing up for a bullish crossover.

On the other hand, the Stochastic has room to fall before it reflects seller fatigue, so the index may continue to follow suit.

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