News and Analysis

Scandex Technical Weekly

U.S. DOLLAR INDEX FUTURES MONTHLY

U.S. Dollar Index Futures Monthly

DX futures made a 2 bar monthly volume reversal in September.  This means that August was a high volume up month and at least a 12 month closing high and September was a high volume down month (go here for more on volume indicators).  This is the first bullish signal since December 2010.  UUP ( Dollar ETF) also made a monthly volume reversal (see below).  Price history begins in 2007 but this is the 4th bullish reversal since then.  The prior 3 nailed major turns.  The 2 bearish reversals also nailed turns.

UUP MONTHLY

UUP Monthly

CURRENT DXY WITH 1980 DXY – 3 MONTHS BEFORE ELECTION AND 1 MONTH AFTER

Current DXY with 1980 DXY - 3 Months Before Election and 1 Month After

In the 3 months leading up to a U.S. presidential election, 1980 is most similar to the current period for DXY.  Is Trump analogous to Carter?  Is Biden analogous to Reagan?  Is Carter’s mishandling of the Iranian hostage crisis analogous to Trump and Covid?  Pure conjecture and not all that useful in my opinion but the 2 time series ARE similar.  If the relationship continues, then the USD is about accelerate higher.

DXY WEEKLY

DXY Weekly

2011-2014 trendline support in DXY held in September.  Focus is higher as long as price is above that level.  96-97 is a general zone to look towards.  This zone includes the 200 week average and center line of the channel from the 2011 low.  Seasonal tendencies are extremely bullish through late November.

DXY SEASONALITY

DXY Seasonality

EURUSD WEEKLY

EURUSD Weekly

EURUSD tagged the median line from the fork that originates off of the 2015 low.  The implication is twofold.  One, a temporary ceiling is in place.  Two, support likely registers on the same angle.  In this case, the 25 line was resistance and is now proposed support.  The line is currently about 1.1460, which is in line with the March high at 1.1495.

AUDUSD WEEKLY

AUDUSD Weekly

Current AUDUSD price behavior is similar to that of 2002.  In both instances, price traded outside of the long term channel before dropping back into the channel.  If this continues, then AUDUSD comes back to .6700-.6800 (200 day average and 25 line within the channel…just like 2002) or so before finding the next low.  Seasonal tendencies are bearish through late November.

AUDUSD SEASONALITY

AUDUSD Weekly

USDCAD WEEKLY

USDCAD Weekly

USDCAD reversed from 13 year channel resistance in March.  The September low is former trendline resistance…resistance turned support.  The 200 week average is also in play.  Since April 2018, the tendency has been for USDCAD to trade under the 200 week average for 1 to 2 weeks before turning up.  This happened in September.  Focus is higher towards the well-defined 1.3665-1.3715 zone.  Seasonal tendencies are bullish through late November.

USDCAD SEASONALITY

USDCAD Seasonality

NZDUSD WEEKLY

NZDUSD Weekly

NZDUSD turned down from well-defined resistance in September.  Significant highs/lows since November 2017 and the 61.8% retrace of the decline from 2017 cluster at .6760-.6820.  Weakness is favored as long as price is below this zone.  Also, ENZL (New Zealand equities in USD terms) looks ‘toppy’.  The ETF reversed sharply from a long term resistance line in January and in August.  Price turned lower from another line this week.  Divergence with weekly RSI is pronounced as well.  A turn lower would provide a tailwind for Kiwi shorts.

ENZL WEEKLY

ENZL Weekly

ENZL AND NZDUSD (MAGENTA) DAILY

ENZL and NZDUSD (magenta) Daily