Market Update – May 5

S&P 500 FUTURES (ES) 4 HOUR

ES found support today from VWAP off of the Feb high.  This level was resistance in March and support in April.  I am treating last week’s high as the bearish risk point but given the support hit today a bigger bounce is favored.  Resistance should be 2890-2930.  This is the 61.8% retrace of the drop from last week’s high, the underside of the line off of April lows, and 2020 VWAP.  Downside focus remains 2670s.

4/30 – ES reversed back below 2939.75 so I’m treating today’s high as a risk point for shorts.  Proposed resistance is 2923/32, which were intraday supports on Tuesday.  A proposed downside swing target is 2670ish.  This is the median line of the bearish fork from the October 2018 high (was support on 3/10 before the 3/12 breakdown).  VWAP from the low is currently 2672.50.  This figure will rise slightly each day.

USDOLLAR HOURLY

The USDOLLAR rally from last week’s low is in 5 waves, which supports the flat interpretation noted yesterday.  Near term, a pullback is favored with levels for support at 12472 and 12451 before the next leg higher.

5/3 – A flat is still possible.  Thursday’s low would compose wave B.  If this interpretation is correct then wave C should carry above 12593.  The most likely spot for resistance remains the wave 4 and red parallel at 12692.  Bottom line, USDOLLAR reacted at critical support (l0ng term magenta trendline) so focus is higher as long as price is above last week’s low.

EURUSD 4 HOUR

EURUSD has pulled back to the noted 1.0900.  I am looking for strength to resume but given the clean USDOLLAR pattern (flat up to 12962), I have to respect the idea that a more important high is in place at 1.1018.  This doesn’t mean that EURUSD is a great short however (EUR crosses, notably EURCAD and EURAUD, look like great longs on pullback for example) but it does at least delay sustained EURUSD upside.  The high volume from last week is 1.0954 and the month open is 1.0955.  So, leave an order to exit longs at 1.0950.

4/30 – We nailed support on EURUSD and focus is towards the noted levels (1.1043 and 1.1239).  Very short term, price could pull back from 1.0990 and 1.0900 is now proposed support.  Tactically, I’d like buying into 1.0900.  Risk for longs is today’s low at 1.0833.

GBPUSD HOURLY

Wave C lower is underway in GBPUSD towards the former wave 4 low at 1.2164, which is also the 38.2% retrace of the rally from the March low.  Near term resistance should be 1.2522/52 (April resistance and 61.8% of drop from last week’s high).

5/3 – GBPUSD carried higher than I thought it would but focus remains lower in proposed wave C towards the 4/7 low at 1.2164.  Last week’s high is right at the 200 day average, which reinforces the idea that GBPUSD put in a B wave high.  Watch for resistance near 1.2520/30 (highs from 4/28, 4/16-4/17).

AUDUSD 4 HOUR

AUDUSD bounced today from the center line from the channel off of the 2011 high (isn’t it awesome how precise these long term channel lines are as support/resistance!?).  Broad focus is lower in order to correct the 5 wave rally from the March low.  Near term resistance should be either .6450 or .6490s (38.2% and 61.8% retrace of recent drop).  RBA is tonight so fading a spike higher into one of these levels is an option.

5/3 – AUDUSD finally cracked and near term focus is on .6164-.6214.  This zone is defined by the 38.2% retrace of the rally from the March low, 3/31 high, and 200 period average on the 4 hour chart.  Proposed resistance is .6444/72, which is the underside of the line off of the 4/3 and 4/21 lows, the 4/14 high, and 4/27 high.

USDCAD 4 HOUR

USDCAD is a decent option for playing the expected short term USD pullback following the show of resistance at the line off of the 3/19 and 4/21 highs.  I also like that CAD futures held VWAP off of the March low (remember that CAD support is USDCAD resistance).  Proposed USDCAD support now is 1.3945/66 (daily reversal support and 61.8% of rally from last week’s low).

4/30 – USDCAD reversed higher after dipping under 1.3855…beauty!  Near term focus is on the mentioned 1.4010.  Let’s see what happens there but the upper parallel and 200 period average on the 4 hour chart could be in play near 1.4120.  Bottom line, I’m bullish against today’s low.  Proposed support is now 1.3900.

CANADIAN DOLLAR FUTURES DAILY