Market Update: November 2

USDOLLAR 4 HOUR

USDOLLAR traded into the center line of the channel from the September low today and immediately pulled back.  Proposed support is 12050 or so.  The top of the channel intersects where the rally would consist of 2 equal legs at 12268 on 11/18.  The 38.2% retrace of the decline from the March high is just above there at 12283 and the 200 day average is currently 12284 (see below).  So, a slight pullback and then higher?  It certainly ‘fits’ with general seasonality and election seasonality.

USDOLLAR DAILY

EURUSD NOW AND EURUSD 2016 BARS – 3 MONTHS BEFORE AND 1 MONTH AFTER ELECTION

I’m reproducing EURUSD election analog from last week’s report.  In 2016, Euro, Yen, and gold spiked drastically before reversing and trending lower for the next 5-6 weeks.  A 1.1900 EURUSD spike would certainly be drastic.  It’s tough to believe something like happens again.  It’s just too scripted and likely a case of recency bias for even entertaining the idea.  I’m still thinking EURUSD resistance in the 1.1750/75 zone.

A picture is worth a thousand words!  Current EURUSD pattern is remarkably similar to 2016.  Recall that in 2016, EURUSD spiked initially before plunging for the next month.  The comparison with bars is shown below.  If something similar were to happen, then EURUSD would spike to 1.1900 before reversing lower.

CRUDE OIL 4 HOUR

Crude nailed support and reversed sharply today.  The action suggests that a decent low is in place.  Near term, 36.13 is proposed support and levels for resistance are 37.70s and near 39.50.

10/27 – In 2016, crude took out its early September lows in the days just after the election before turning up sharply.  Watch for something similar here.  Proposed support is 34.25 (2 equal legs down from the September high).  Interestingly, the low in crude following the 2016 election has been resistance since July (see 2 charts down).

USDJPY 4 HOUR

USDJPY continues to hold up but pay attention to 105.00/30 for resistance.  The top of the zone is the 61.8% retrace.  Given the prospect of USD strength post election, I lean towards re-buying (or buying more) in the event of a reaction lower from this zone.  Proposed support is the high volume level from Friday at 104.55.

10/29 – USDJPY reversed higher today.  The low was right at the center line of the channel from the March high…what a beauty.  Near term focus is on low 105.00s.  I’ll reassess if that level is reached.  Watch for support near 104.35 (high volume level and 10/21 low).

GBPUSD 4 HOUR

GBPUSD took out the 10/16 low before bouncing.  1.3000 has been support and resistance since August and is proposed resistance again.  This is also near the 50 day average.  Downside focus is 1.2675-1.2700.  This is the September low, 200 day average, and 25 line of the fork from the September 2019 low (see daily chart below).

AUDUSD 4 HOUR

AUDUSD has been treading water above the center line of the channel from the high since turning sharply lower on 10/28.  Again, I’d be willing to go with weakness below the center line and target .6835 otherwise pay attention to .7070s and .7130s for resistance.

10/29 – AUDUSD is playing out perfectly.  Low today is right at the center line of the short term channel.  Resistance remains the 25 line (thick red line) in the .7080s.  If price fails to bounce and breaks below the center line, then I’d favor going with weakness (median line acceleration).