Market Update – May 18

AUSTRALIAN DOLLAR FUTURES 4 HOUR

The downside remains favored in AUDUSD towards the .6250s.  The former 4th wave low is .6254 and VWAP from the March low is currently .6249.  This is also the lower parallel of the bearish fork from the high.  If AUDUSD is bearish then resistance should be about .6460, which is the underside of the line off of the 4/21 and 5/6 lows and VWAP from the April high.  Seasonal tendencies are bearish for the next few weeks (see below).

5/13 – AUDUSD has also reached possible support from a short term trendline.  Notice how VWAP from the April high was resistance in early May.  That is currently .6472 and is proposed resistance along with the high volume level from today at .6479.  Bottom line, I remain bearish but need to see resistance at .6472/79.  The situation may be resolved with Australian employment today.

AUDUSD WEEKLY SEASONALITY

NEW ZEALAND DOLLAR FUTURES HOURLY

NZDUSD downside remains favored towards the former 4th wave low at .5840, which is also the lower parallel of the bearish fork from the April high.  Resistance should be VWAP from the March low at .5967, which is also the median line of the fork.  This is an important level because VWAP from the March low was previously support.  Seasonal tendencies turn up this week on the 30 and 20 year lookback periods so it’s not out of the question that we end up flipping from short to long soon (see below).

5/13 – NZDUSD has reached potential support from the April trendline and VWAP off of the March low at .5967 (spot and futures are the same price right now so these levels apply to spot).  I remain bearish and await a break but recognize potential for a bounce.  Watch for resistance from the high volume level (RBNZ) at .6033.

NZDUSD WEEKLY SEASONALITY

GBPUSD HOURLY

GBPUSD failed to hold 1.2130/64.  Watch the upper end of this zone for resistance because it intersects a short term upper parallel that has provided resistance over the last week.  The next downside level of interest is probably 1.1880-1.1934, which is the 61.8% retrace of the rally from March and the 3/20 high.  This zone intersects the short term lower parallel over the next few days.  Any reversal evidence (such as a volume reversal) should be taken seriously given seasonal tendencies (see below), which turn up on the 20 and 30 year lookback periods this week.

5/14 – GBPUSD has reached the top of the noted support zone of 1.2130/64 and a 3 wave corrective decline may be complete or nearly so from the April high.  Recall that this is also the former 4th wave low, 38.2% retrace of the rally from the March low, and 25 line of the fork from the September low.  I’m contructive GBPUSD now.

GBPUSD WEEKLY SEASONALITY