Market Update – September 10

USDOLLAR has yet to break above 12087 and the rally has failed so far a the upper parallel from the Schiff fork off of the March high.  I’m still leaning towards action since 7/31 as a base that price will work higher from.  Watch for support now near 11973.  The behavior change in 4 hour RSI is worth noting.  RSI registered an ‘overbought’ reading on this advance (see below chart).  In downtrends (depends on the scale of course but I 4 hour is compatible with my style for 24 hour markets), RSI tends to register readings below 30 at price lows but does NOT register overbought readings at price highs.  In fact, RSI will often top near 60 on counter-trend rallies.  The opposite is true in uptrends…readings above 70 at price highs and readings above 30 (often near 40) at price lows.  With this in mind, USDOLLAR is no longer in a downtrend (on the 4 hour chart) but either in a sideways or uptrend.

8/27 – For the 4th day since 7/31, USDOLLAR low today was on the median line from the fork that originates at the 2016 high.  Clearly, the level is important.  If price breaks below, then real crash risk is on the table.  However, I’m positive as long as price is above the line.  Strength above 12087 would complete a month long bullish base (see hourly chart below).

USDOLLAR 4 HOUR

Watch for support in DXY from the top side of the just broken wedge barrier near 92.55.  94.09 is the next upside level followed by the noted 95.18.  94.09 is a longer term parallel that was support in 2018 so it’ll be important to see what happens at that level if reached (see daily chart below).

9/7 – DXY is attempting to break the wedge described last week.  Price is sitting right at the ‘decision point’ as I type during quiet Labor day hours here in the U.S.  I’d go with strength from the current level once more active trading gets underway.  Initial upside focus is the line off of the March and May highs near the 7/23 high at 95.18.

DXY DAILY

EURUSD 4 HOUR

EURUSD is stuck between its wedge barrier and the underside of the channel from the May 14th low.  Where to after ECB tomorrow?  If the reaction is higher, then pay attention to 1.1910 for resistance.  This level is also the 61.8% retrace of the decline and the upper parallel from a short term bearish fork.  If it’s lower, then below 1.1750 should unleash downside towards 1 1.1400 handle.

9/7 – EURUSD is sitting just above the breakdown level described last week.  If price bounces off of this level, then proposed resistance remains 1.1900/10.  However, I’m also willing to go with weakness under 1.1780 now.  Downside focus is on old highs at 1.1423 and 1.1496.

USDSEK 4 HOUR

USDSEK continues to trade beautifully from a technical perspective.  Channel resistance from the March high was precise resistance, along with the median line from the short term bullish fork.  8.69-8.71 is proposed support for a higher low.

8/26 – Different symbol, same story.  If USDSEK action through August is a bottoming pattern then price needs to turn up here.  Above 8.8150 would confirm that a low is in place.  Again, price has been trading along the full extension of the channel from the 2018 low and the lower parallel of the channel from the March high.  Great place for a low.

AUDUSD 4 HOUR

Keeping with RSI range rules, the blue bars on this AUDUSD chart indicate when RSI crosses above 75.  The red bars indicate when RSI crosses below 25.  Since late 2019, there have been 4 such crosses.  These ‘extreme’ readings indicate trend changes.  Following both crosses above 75, the next price lows occurred when RSI pulled back to 40.  Following the cross below 25, the next price high occurred when RSI bounced to 60.  RSI has moderated to 55 following this latest drop under 25.  Watch for a price high when RSI is near 60.  Price wise, the center line and 61.8% retrace of the drop at .7329 are proposed resistance (see below chart).

9/7 – .7400-.7500 proved important again in AUDUSD.  Friday’s drop tested the lower channel line from the 6/15 low.  A break below would be indicate an important behavior change and put focus on the channel extension line, which intersects .7065 (June high and 7/24 low) late this week.  If price bounces here, then .7340 should provide resistance.

AUDUSD 4 HOUR