News and Analysis

Market Update – May 11

GOLD FUTURES 4 HOUR

Since reaching the long term parallel (magenta line) on 4/13, gold has traded sideways.  Price rolled over last week from short term trendline resistance so be aware of the lower boundary near 1683.  A break below there would leave price action since 4/13 as a consolidation top.  Immediate downside focus would then be the 3/31 low at 1576.

USDOLLAR HOURLY

Price action since the 4/30 low can be labeled as a 5 wave rally and 3 wave decline.  Friday’s low is at the 61.8% retrace of the 5 wave rally so it’s possible that Friday’s low marks the wave 2 of C low.  I also like that the low is on ‘news’ (NFP).  Let’s see early week action shakes out but my bias is higher.

5/4 – 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.

AUDUSD 4 HOUR

AUDUSD has reached proposed resistance (high on Friday was .6548) from the underside of the April trendline.  This is a good spot for AUDUSD to roll over.  It’s simply a wiating game right now.  Below the high volume at .6499 would suggest that a top is in.

5/7 – I’m getting sliced and diced in commodity currencies right now.  Even so, I still lean towards the downside in AUDUSD.  Reasons for my view include 5 waves up from the March low and the most seasonally bearish period of the year through May 22nd.  The month open at .6510 was nearly reached today but I’m watching the underside of the April trendline for resistance now at .6530/40.

GBPUSD 4 HOUR

GBPUSD traded into proposed resistance on BoE, dropped to a new low and then recovered on Friday.  Ideal resistance is now 1.2500, which is the 61.8% retrace of the decline from 4/30 and the underside of the line off of lows from the 4/21 low.   Downside focus remains 1.2130/64.

5/6 – BoE is tomorrow and it looks like the bounce to 1.2484 is the extent of the corrective bounce in wave 2 of C.  Proposed resistance is now 1.2405/20, which is a well-defined horizontal level and the neckline of a short term head and shoulders.  I am looking to short into that zone with downside focus on 1.2130/64.