Market Update – May 29

Be aware of 3136 in SPX as a possible pivot.  The level is defined by the 78.6% retrace of the decline,March high, and the line that crosses highs in 2018 and 2019.  This line was support in December.  Price has responded to Fibonacci retracements (23.6%, 38.2%, and 61.8%) during the advance which increases confidence that ‘something’ happens at the next Fibonacci retracement.

QQQ HOURLY

QQQs turned down at the end of the day but a break below 223.94 is needed in order to break the uptrend.  If/when that happens, it might occur with a gap as QQQs have gapped through this level multiple times this year.  If we get a final surge then pay attention to the all-time high at 237.47, which intersects the line that crosses highs since late April.  Finally, divergence with hourly RSI indicates a market at risk of reversing lower.  The the same thing happened at the low in March.

EURUSD 4 HOUR

EURUSD is testing a massive level defined by the top of the channel from the January 2019 high and median line of the bullish channel.  A break above would likely lead to upside acceleration (median line acceleration) into 1.1200 (75 line within the channel).  If that happens, then the topside of the channel and median line would become support.  If price pulls back now, then support should be former resistance at 1.1020.

5/26 – EURUSD faces a test from range highs and the 200 day average at 1.1012 but I’m a bull as long as price is within the bullish channel from the March low.  Proposed support is the 25 line (blue parallel) near 1.0935.  The median line is possible resistance near 1.1065 but general upside focus is the upper parallel near 1.1320.

USDSEK 4 HOUR

USDSEK is testing a massive level defined by the lower channel line from the January 2018 low and median line of the bearish channel from the high.  A break would be significant and likely lead to a collapse.  That said, support is support until broken (and then it becomes resistance).  USDSEK has a tendency to lead broader USD moves so keep an eye on what happens here.

GBPUSD 4 HOUR

GBPUSD has regained 1.2300, which is a positive.  The ‘real’ bullish signal in my view however would be a break above the magenta parallel, which has been support and resistance since April.  That line is basically now so pay attention!  In the event of a breakout, immediate focus would be on the median line near 1.2800.

5/27 – GBPUSD erased most of yesterday’s rally but I remain constructive.  In fact, price found support near the short term trendline that originates at the 5/18 low.  I want to see strength above 1.2300 (blue line) before committing capital to the upside again though.  In general, this level has been support and resistance for a little over a month.

USDJPY HOURLY

Since tagging 108.08, USDJPY has consolidated in a relatively tight range.  This could be a bullish triangle or simply a consolidation top.  Basically, be nimble (always).  A break below the short term trendline near 107.50 would warrant a short attempt, especially in light of the extended rally into the 200 day average.  The chart below shows extended rallies (red dots) and extended declines (blue dots) into the 200 day average since 2014.

USDJPY DAILY

EURAUD 4 HOUR

EURAUD held yesterday’s reversal off of support defined by the top side of a trendline and 200 day average (not shown).  The rally above a short term trendline today is the bullish signal to trade from the long side.  Initial upside focus is the 23.6% retrace of the decline from the March high at 1.7243.  Near term support should be 1.6620/50.

EURCAD DAILY

EURCAD action since the March high is a wedge and price is testing the upper barrier of that wedge now.  This is a potentially explosive pattern.  I also like that price based around the gap from early March.  However, I prefer EURAUD over EURCAD given where AUDCAD trades (next chart).

AUDCAD DAILY

AUDCAD is into a major level.  The level in question was support in 2013, 2015, and 2018.  A pullback from a level this significant ‘makes sense’.  .8835/90 is a zone to keep in mind for support if price does pull back.

AUDJPY DAILY

AUDJPY is at risk of reversing lower.  The rally from the March low is in 5 waves and price is testing the upper barrier of a rising wedge.  Sometimes, price will take out the top of the wedge before reversing lower (in Elliott, this is called an overthrow).  If that happens here, then be aware of 72.40s for resistance.  This is former support and the 50 week average, which has been precise as both support and resistance for years (see weekly chart below).  If price turns lower now then I’ll navigate short term price action for an entry.

AUDJPY WEEKLY