The XJO inched lower today during quiet trade across Asia today. Whilst the trading range was largely restricted, bears will be cheering a third decline out of the past eight sessions. Whilst there isn't any excitement on the daily chart today, we note a drop beneath the key 4,969 level which should prove to be the first line of resistance protecting 5,000. We expect upside to be capped at this level for the remainder of this week.
The hourly chart shows signs of reversal, with the MACD heading into bearish divergence at the end of today's session. Bears will be looking for a reversal lower than 4,933 to see the uptrending channel break down, and begin a possible head & shoulders pattern that could see levels retrace to below 4,900 quickly upon completion.
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