It had spent a week consolidating as it traded wildly back and forth, between 25000 and 27000 as it has exploded in volatility by three times, before dropping through. With the exception of the 25000 level, the US index has completely ignored any possible levels of support on the way lower indicating how strong the move has been, which has now been punctuated by the most recent drop.
We also covered UK Oil which spent the remainder of the week falling lower again to a four year low and remaining below $30, as it is finding little support from anywhere. It experienced a significant gap down from $45 two weeks ago to $35, and despite its efforts to rally back, it has since fallen lower. It now has no obvious support levels with the possible exception of round numbers, eg. $25 and $20. The last four weeks have now seen UK Oil fall from a previous key level at $58 down to the multi-year lows. Generally it has not performed well this year falling from multi-month highs above $70 in the first week of the year down to its recent multi-year low as it has been struggling to receive any support from anywhere. This period has also been accompanied by a significant increase in volatility.
In the last two weeks the EURUSD has fallen sharply from its highest level in more than 12 months above 1.15 down to below 1.07 before consolidating a little to finish the week. The EURUSD has been on a rollercoaster in the last few weeks as it had only just recently rallied strongly back into one of its favourite trading ranges between 1.11 and 1.12 before continuing even higher. The EURUSD fell to a three year low before its recent consolidation, although it still looks vulnerable to further falls. The 1.10 level has propped up the currency pair several times in the last few months however it failed on this occasion such was the strength of the recent drop. The 1.10 may now reverse roles and offer any resistance to any rallies higher.
To finish out the week we covered the GBPUSD which finished the week bucking many trends and rallying a little higher. In the last week the GBPUSD dropped dramatically down to its lowest levels in 35 years below 1.15 after having dropped almost as sharply from above 1.30 down to a key level of 1.25. The sterling was able to enjoy some short term support from the 1.25 level a week ago however that level also gave way with the GBPUSD collapsing. Just prior to the dramatic falls, it had done well to rally back above another key level of 1.30 after applying pressure to this level, however for the most part of the previous four weeks, the sterling has remained below this key level. The 1.30 level now seems a distant memory and for several months the GBPUSD continued to trade around this key level showing no signs of breaking away in either direction.
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