Market Update: January 20

DXY 4 HOUR

The short term median line continues to act as resistance and the 25 line continues to act as support in DXY.  If price fails to hold here then the 61.8% retrace at 89.87 is possible support.  The upper parallel from the Schiff fork off of the March high was resistance last week.  A break above would be significant.  Until then, the USD bounce is just that…a bounce.

1/18 – DXY pulled back on 1/11 and found support from the previously uncovered close at 90.07 (gold horizontal line).  Price has traded back to the median line and paused.  If price pulls back, then watch for support near 90.58 (neckline).  A break above the median line should lead to upside acceleration as per median line guidelines.

GBPUSD DAILY

The line that connects the March and December 2019 highs was resistance yet again today in GBPUSD.  After trading to its best level since May 2018, GBPUSD closed near the lower end of its daily range.  Sure, this is resistance but confidence in USD strength at this point is extremely low.  Extreme sentiment, extreme positioning, volume reversals, etc. simply haven’t mattered.  Maybe I’m capitulating and this feeling is a signal.  I’d be willing to play a double top on a drop below 1.3520.

USDJPY HOURLY

No change to USDJPY.  I’m looking to either play a breakout above 104.40 or buy a hold near 103.25.  BoJ is tonight.

1/14 – I’m either looking to trade a USDJPY breakout above 104.40 or buy a dip into 103.30ish.  As the daily chart below illustrates, there is ‘a lot of air’ above 104.40.  2 legs down from the 1/11 high is 103.33, which is just above the 61.8% retrace at 103.26.  The year open is also 103.28.  Big level!

NZDUSD 4 HOUR

Kiwi focus remains the lower parallel of the channel from the March low.  That line is currently about .7040.  Price is testing resistance now from the confluence of the line off of the January highs and the underside of a parallel within the channel from the March lows that was support in December.  The level is also defined by the year open at .7184.

1/14 – NZDUSD has been pressing into the noted center line (red line) from the channel off of the March low the last few days.  Ideally, the next lower gets underway immediately.  If that happens, then the 25 line is a level of interest near .7115 but the ‘real’ level of interest is the lower parallel near .7000.  Another reason to ‘like’ the short side right now is that VWAP from the high and 2021 VWAP continue to act as resistance (see below).