News and Analysis

Market Update: December 22

COPPER 4 HOUR

Copper 4 Hour

Keep a close eye on ‘Dr. Copper’.  Price is nearing the mentioned 3.50.  A break below would indicate a minor behavior change and shift immediate focus to roughly 3.40 (25 line) and then the lower parallel near 3.30.

12/21 – Copper continues to trade on both sides of the 61.8% retrace of the decline from 2011.   I continue to follow near term levels from the channel off of the March low.  The center line is about 3.50.  That needs to break in order to suggest that copper is lower, probably until the lower parallel.

CTA AGGREGATE USD POSITION

CTA Aggregate USD Position

Uh…the USD short trade is crowded.  That simple.  Crowded trades tend to get unwound in a hurry and we’re already starting to see swings exacerbated by thin year end liquidity…

GBPUSD DAILY

GBPUSD Daily

Yes, we know that 1.3500 is massive for GBPUSD but price is also failing at the median line from the fork that originates at the Brexit low.  When this happened in August, Cable pulled back 7 big figures.  Near term focus is on 1.3100ish but this is a great spot for another big pullback.  The battle lines are at least drawn.

12/20 – Cable has nearly erased all of last week’s rally already.  Once again, the massive 1.3500 level has proved itself as important resistance.  Broad downside focus is 1.2676 (former 4th wave of one less degree) but near term downside focus is the line off of the September and November lows near 1.3100 (see below).  Proposed resistance is 1.3440.

EURJPY WEEKLY

EURJPY Weekly

Yen crosses are reacting at important levels.  EURJPY has turned down just below the trendline from the 2008 high.  Watch for resistance near 126.40.  Possible support is 125.10, which is both former resistance and multi-month channel support (see 4 hour chart below).

EURJPY 4 HOUR

EURJPY 4 Hour

NZDJPY WEEKLY

NZDJPY Weekly

NZDJPY filled the previously uncovered close from May 2019 early this Month and is threatening to break down from a 4 week topping pattern now.  The 200 week average has been resistance for years and is proving itself again at the current juncture.  Near term focus is on former resistance at 72.00 with a much deeper drop (69.00ish)  from the current level possible given the specter of 5 waves up from the March low.

CADJPY DAILY

CADJPY Daily

CADJPY spiked through the June high 2 weeks ago and left a doji on the weekly candle chart.  The failure portends a drop back towards the bottom of the 6 month range near 78.  A short term count is shown below in which a bounce from nearby would compose a 4th wave.  Watch for resistance near 80.60.  The next possible support is probably the line off of the March and May lows near 79.50.

CADJPY HOURLY

CADJPY Hourly