Market Update – July 2

USDJPY DAILY

USDJPY completed its flat and reversed from the well-defined 108.00/08, carving a bearish outside day today.  108.00 is the 61.8% retrace of the February-March decline.  108.08 was high print a number of days in April and May.  The fractal nature of markets is on display in the chart below.  The pattern from 6/5 to today is the same shape as the pattern from 3/24 to 6/5.  That’s a fractal!  Finally, I like that Yen futures held 2020 VWAP and VWAP from the February low.  Very short term focus is on 106.92 although significant downside potential exists in USDJPY as long as price is under today’s high.  107.71/89 (high volume level and 6/29 high) is resistance.

6/25 – Best guess in USDJPY now is that a flat is unfolding from the 6/11 low.  The drop from 6/16 to 6/23 was left in 3 waves which is a ‘tell’ that a flat is indeed unfolding.  Support should be 106.60 now.  This is the high volume level from Tuesday, 61.8% retrace, and 6/11 low.  Resistance now is probably 108.50

USDJPY 4 HOUR

JAPANESE YEN FUTURES DAILY

GBPUSD 4 HOUR

GBPUSD followed through on its bullish reversal from parallel support.  Simply, support for entry is 1.2410/37.  This is a short term neckline and 6/26 high.  Short term upside focus is 1.2648/88 (former highs, underside of recent trendline support, and 200 day average) but longer term bullish potential is significant.

6/30 – GBPUSD has reversed higher from the 25 line of the fork from the September low.  Recall that the 25 line was support in May.  Simply, support held so I’m bullish.  Initial focus is the underside of former trendline support.  A pullback from 1.2400 (now) seems likely with the 200 hour average and short term trendline in the way (see hourly chart below).  Proposed support is 1.2314/35.

GBPAUD 4 HOUR

I’m zooming in on the GBPAUD chart to show the break above the trendline (blue line) from the 5/3 high.  The top side of this line is proposed support for entry along with the 6/30 high at 1.7972.  Swing upside focus is the 6/12 high at 1.8452, which intersects the center line of the channel from the March high.

6/30 – GBPAUD could turn up here too!  A parallel based on the trendline from the 2013 low was support today.  This parallel was support for the last 2 big lows in December 2018 and July 2019.  Notice that the median line was precise resistance in March.  That action suggests that changes in price direction will occur on the angle of the line from the 2013 low.