Market Update: October 8

EURUSD 4 HOUR

It’s awfully quiet out there.  EURUSD is on pace for its smallest weekly range since 2/21, which of course is right before volatility exploded.  Hopefully we get something similar now.  My view on EURUSD hasn’t changed.  Price continues to churn just under important resistance (neckline and VWAP).  I’m presenting a new fork today.  Notice how highs and lows since over the last month have been on/near the 25 and 75 lines within this structure.  I ‘favor’ EURUSD holding below this resistance.  A slope confluence suggests important support between 1.1400 and 1.1500 towards the end of October / mid-November (see below).  This makes sense from a seasonal standpoint (see 2 charts down).

10/5 – 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.

EURUSD 4 HOUR

EURUSD SEASONALITY

NZDUSD HOURLY

Resistance should still be near .6614 in NZDUSD.  The 61.8% retrace of the drop from 10/6 is .6616 and 2 legs up from today’s low would be .6614.  The 10/2 low is .6614 and the month open is .6617…what a cluster!  I favor shorts into that tight zone.  Downside focus remains .6370/80.  VWAPS off of highs and lows since March remain in play (see below).

10/6 – Kiwi broke the short term channel, which suggests that the next leg lower is underway.  2 legs down from the high is .6371…in line with the June support at .6380.  Guess what, 2020 VWAP and VWAP from the March low are both .6380 (see below).  Resistance should be .6614/30 (Friday and Monday lows).

NEW ZEALAND DOLLAR FUTURES 4 HOUR

USDJPY 4 HOUR

USDJPY has finally sustained strength above the 25 line within the channel from the March high.  This line had held as resistance since 6/30.  The top side of the line should be support now near 105.50 (also the month open).  The level is reinforced by short term trendline support.  Upside focus is the top of the channel from the March high near 106.70.

GBPJPY HOURLY

GBPJPY is riding short term trendline support, which comes in near the well-defined 136.40s.  A dip into this level would present an opportunity to buy with a tight stop for a run at the 61.8% retrace of the decline from the 9/1 high at 139.02.  This level intersects the underside of the line off of the May and late June lows in the middle of next week.