The sudden plunge of indices last night and present status of currencies

 I was lazing at my station last night with the Dow Jones Chart turned on. I remember it was around 8:00PM plus (Singapore time). I was watching some video on Youtube.com when all the sudden I noticed a sudden plunge on Dow Jones 3-minute chart, it was exactly 8:30PM. 

I was taken aback with the sharp descend. While I faithfully follow the principle of technical analysis which discount any fundamentals, I can't help but to think, " what happened?"  

I quickly check on other indices and I found similar situation even on Nikkei and Hang Seng. I even checked on the German index DAX and the same thing happened, there must be an event that shook the market.

Fig 1. Nikkei225, Hang Seng and Dow Jones 3-minute chart

Turn out there is a Fed report that while the rate was raised, inflation in August was above expectation at 8.3%, rose by 0.1% compared to previous month.

Anyway, as I have said, I was lazing. I was too tired to do anything about it, Furthermore, this may lead to congestion, and I was not really keen on Dow Jones as it means mid night trading for me.

As for today, my main intention is on currencies as there has been much hype about weakening currencies. Already many experts have been telling people that it is not the weakening of the currencies of their countries, it is the strengthening of USD. This was also what I mentioned in What is USD doing?

I will focus on 3 currencies today to determine where they go: JPY, EUR and GBP. Even though technical analysis supposed to enable quick analysis, it does take time to analyze each chart.

Let's start with JPY since there is so much warning from youtube.com videos that JPY is very weak against USD even though it is known as a safe haven currency. 

Fig 2. JPY weekly chart

Based on my interpretation, there are 2 zig zag patterns and, in a way, form a double bottom, so there are 3 measurements. In the long run (blue zig zag), it has already crossed the 61.8% projection at 136 and heading to 146. 

we can ignore the other zig zag as well as the double bottom. The objectives were much lower and surpass.  

Breaking146, the next level of resistance is 159. Will it go further than that? Possible, but let's focus on the more immediate ones first.

Let's move on to EUR.

Fig 3. EUR weekly chart

Interesting enough, there are also 2 zig zags and one double bottom (more like a triangle). 

With the longer-term zig zag (in blue), it has already past the 61.8% projection at 0.9505, the next level of resistance is the 100% projection at 1.046 and 127% projection at 1.114.

 As for the double bottom (or triangle), the resistance is even further at 1.082.

As for the smaller zig zag (in green), the next level off resistance is 161.8% projection at 1.041.

So 1.04+ is really one level to watch out for.

Finally, let's move on to the last currency of this entry, GBP.

Fig 3. GBP weekly chart

Unlike the other 2, GBP lacks the formation of double bottom (or triangle). There are only 2 zig zags that I can measure with projection.

Using the longer-term zig zag (in blue), the 100% projection resistance at 0.948 while 127% at 1.0165.

The more immediate set up on the other hand, resistance at 100% projection is 0.877 while 127% at 0.9246.

While the oil price is kind of stabilized in US, it is because of a stronger USD. For other countries however, we will continue to see higher prices on oil, unfortunately.