News and Analysis

Market Update: December 27

DXY 4 HOUR

DXY 4 Hour

DXY is trading in a tight holiday range.  Strength above the 12/21 high of 91.02 is needed in order to suggest that a low (maybe wave 5 of 5) is in place.  A longer term chart is shown below.  The recent low is a few ticks above the March 2009 high…good spot for a low.  95.00ish is eventual resistance.

12/20 – DXY is up sharply in early week trading, raising the specter that wave ‘5 of 5’ is complete at last week’s low.  If the rally stretches into 5 waves, then focus will be on buying a small pullback for what likely proves to be a multi-month rally in order to correct the entire decline from the March high.  Stay tuned.

DXY DAILY

DXY Daily

EURUSD 4 HOUR

EURUSD 4 Hour

No change to EURUSD…just a quick update in case all of the holiday cheer caused you to forget about the wave count.  My favored view is that a 4th wave lower is underway towards 1.2060/70.  If price breaks the lower parallel of the channel from the 11/2 low then I’ll more seriously consider the potential that a more important high is in place.

12/21 – EURUSD held the center line of the channel from the 11/2 low…again.  This line has been support since 12/9.  Clearly, it’s important.  One scenario to consider is that weakness since last week is a 4th wave within the 5 wave cycle from the November low.  If this interpretation is correct, then a drop to 1.2060/70 would unfold before one more leg up unfolds.

NZDUSD 4 HOUR

NZDUSD 4 Hour

.7000 is CLEARLY critical.  I view it as the trigger level for a short.  Near term, price is testing the well-defined .7020 so price could turn down and put in a lower high right here.  The long term chart is shown below for reference.

12/20 – Kiwi has turned down following the test of .7152.  Remember, this is the 50% retrace of the decline from the 2014 high…the low was in March!  Price is testing short term trendline support now.  If price breaks below, then watch for the underside of the line to provide resistance in order to establish a short position.

NZDUSD DAILY

NZDUSD Daily

USDTRY 4 HOUR

USDTRY 4 Hour

USDTRY has definitively broken the March-August trendline.  This line was support in November following the plunge from the top.  The implication is that the path of least resistance is lower.  The underside of the broken trendline is now proposed resistance near 7.78.

12/13 – Absolutely no change to USDTRY.  I remain of the mind that weakness since 11/24 is a B wave and proposed support remains 7.7145.  Eventually, there should be the best chance to short since the November top…maybe near the 61.8% retrace of the drop at 8.1706.