Market Update 11/30/2020 – USD Reversal!

INSIDER BUYING AND SELLING

There are a lot of reasons for insiders to sell and only one reason to buy.  However, when the difference between buying and selling is this extreme it’s likely that something big is going on.

USDOLLAR DAILY

USDOLLAR reversed higher today after undercutting the September low.  Importantly, price reversed at the median line…just as it did in September.  Divergence with RSI attends the low, as it often does at important turns.  Today was also a bullish engulfing pattern.  This occurs when price opens below the prior close and closes above the prior open (close up view below).  I like the USD higher.

USDOLLAR DAILY

DXY DAILY

DXY reversed higher today after undercutting its September low.  Note that EURUSD did NOT take out its September high.  This non-confirmation is typical at turns in EURUSD and DXY.  Also, DXY made a daily volume reversal from a 2 year low today.  Those instances are shown on the chart below.

U.S. DOLLAR INDEX FUTURES DAILY

EURUSD 4 HOUR

EURUSD tagged the line off of the 2008 and 2014 highs today (magenta line) and reversed lower.  Again, the non-confirmation with the DXY low is viewed in a bearish light.  The hour of the high today was on extremely high volume, which increases confidence in the validity of the reversal.  That high volume level is 1.1964 and should provide resistance now.

11/29 – Short USD is the consensus view but don’t take my word for it.  The article below from WSJ states “…investors think it’ll fall further.  The consensus view of a falling dollar is based on a big assumption…”  Also, JPM says EURUSD is more than 10% expensive based on the relative downgrade in Euro area growth forecasts (see below).

The Dollar Is Weak. Investors Bet It Will Slide Even More.

Consensus views don’t usually play out.  Keep this in mind as EURUSD approaches the September high of 1.2011.

EURO FUTURES 8 HOUR

USDSEK DAILY

USDSEK reversed sharply higher today from a 2 year low.  J Spikes from 2 year price extremes are shown on this chart.  The rally from today’s low is in a clear 5 waves (see below), which reinforces the view that a low is in place.  A slight pullback is expected with support near 8.5430 (former 4th wave low) or 8.4980 (61.8% retrace).

USDSEK 10 MINUTE