Market Update: October 5

USDOLLAR 4 HOUR

USDOLLAR turned up from the top side of the neckline on Thursday but returned to the neckline today.  Failure to turn up now risks a failed breakout, which would be viewed in a bearish light.  It’s ‘wait and see’.

10/1 – USDOLLAR has reached and reacted to the breakout level (neckline).  I am bullish…now…especially when viewed in the context of the longer term bullish reversals noted above.

U.S. DOLLAR INDEX FUTURES HOURLY

DXY reached the top side of its breakout level (neckline) today.  Support here is reinforced by VWAP from the low, which held as support throughout September.  This is an important decision point and I am ‘thinking’ that price turns higher.

10/1 – Different USD index but the same story.  Price tested the breakout level today (low was 93.52).  Maybe DXY spikes lower on NFP before reversing higher in earnest but I am a bull.  In fact, a spike lower to test VWAP from the September low would make sense.

EURUSD 4 HOUR

EURUSD is testing its breakdown level, which is the underside of the neckline.  This level is also defined by VWAP from the high (see futures chart below) and the line off of highs in March and June, which was support on 9/17.  I am looking for resistance to hold.  Failure to do so would indicate a failed breakdown and be viewed in a bullish light.

9/29 – We can now label LPSY.  Resistance should register between now and 1.1780s.  Watch for signs that price is rolling over again (volume reversal, long upper wick on hourly or 4 hour chart, etc.) before adding to the short position.  An updated futures chart with Wyckoff labels is below and the updated spot chart is 2 charts down.

EURO FUTURES HOURLY

GBPUSD 4 HOUR

GBPUSD has been trading against the median line from a short term bullish fork since 9/28.  This is also resistance from the 8/12 low and 9/16 high.  I favor weakness from the current level but will be on the lookout for a support hold from the lower parallel and former lows in the 1.2805/36 range.

NZDUSD 4 HOUR

NZDUSD continues to trade around the noted .6640.  Price needs to break the short term channel in order to suggest that another leg lower is underway.  The lower end of the channel is about .6620.  Until that happens, continued strength into the top of the channel and 61.8% retrace of the decline at .6690 should be respected.

9/29 – NZDUSD is into .6600 so price could turn down now but as is the case for AUDUSD, respect additional upside until .6640.  This is the top of the short term corrective channel, 200 period average on the 4 hour chart, and 9/11 low.  The level was also support on 9/22 before the break.  A dip prior to obtaining .6640 could see support at .6560/70.  The spot chart is below.

EURJPY 4 HOUR

The EURJPY rebound faces potentially important resistance at 124.90.  This is where the rally from 9/28 would consist of 2 equal legs.  It’s also he confluence of the line off of the September highs and short term (corrective) channel resistance.  A show of resistance at this level would warrant a short position.