Market Update – July 15

BRITISH POUND FUTURES 4 HOUR

British Pound futures pulled back to VWAPs off of the June high and low.  The level is also the 200 period average on the 4 hour chart (spot is below) and more or less the breakout level from the short term head and shoulders bottom.  I like GBPUSD higher as long as price is above today’s low.  Near term support and resistance levels are 1.2510 and 1.2618.

Just a quick update to yesterday’s comments.  Price traded through but reversed below 2020 VWAP, which I view as a negative.  The spot chart below shows that price also reversed near the April highs.  I’m thinking eventual support now near 1.2500, which is where VWAP from the June high and low intersect.  The 38.2% retrace of the rally is 1.2510, so keep an eye on 1.2500/10.

GBPUSD 4 HOUR

USDJPY HOURLY

USDJPY levels are playing out beautifully.  The median line was support and high today was 107.43.  The rally from 106.65 is in 5 waves so expectations are for a small pullback before another leg higher.  Proposed support is 106.94.  107.70 and 108.74 (2 equal legs up) are possible resistance levels.  BoJ is Wednesday.

7/8 – USDJPY focus remains on the center line of the channel from the March high.  That line is currently about 106.70.  Resistance now should be 107.45/50 (7/1 close and weekly open).  Be aware of the bigger picture.  Yen futures (see below) held 2020 VWAP and VWAP off of the February low the last 2 weeks.  As such, strength through the center line (below in spot and above in futures) could lead to sharp acceleration in the Yen move (lower in spot and higher in futures).

EURUSD 4 HOUR

EURUSD is approaching the June high in what I’m viewing as a 5th wave.  In other words, I’m on reversal alert with each tick higher.  Pay attention to the noted 1.1460.

7/8 – We nailed EURUSD support (1.1261) and the view remains that a 5th wave is underway towards 1.1460.  The 7/2 high at 1.1303 ideally holds.  Also notice the many  inflection points near the 75 line.  That line is just above 1.1300.

USDCAD DAILY

USDCAD is trying to break above the channel that has defined trend since the March high.  This would be an important behavior change and shift focus to 1.3830/50 (38.2% retrace and former support) and then 1.4140/70 (important highs/lows and 61.8% retrace).  We looked at seasonal tendencies in AUDUSD and NZDUSD yesterday, which turn down after this week.  USDCAD seasonal tendencies turn up now.  If this is going to break out now, then I’d think that the month open at 1.3579 holds as support.  BoC is on Wednesday.

USDCAD WEEKLY SEASONALITY

GBPJPY DAILY

GBPJPY continues to respect parallels within the Schiff fork from the March low.  The 25 line has been resistance throughout July so the lower parallel is in line for support again in the 133.30/60 zone.  The 50 day average reinforces that level as well.  Broader upside focus is 138.50/75 (slope confluence and daily reversal resistance).