Market Update: February 4
SPOT GOLD 4 HOUR
Gold broke the center line of the channel from the August high today and accelerated sharply lower (recall the median line acceleration guideline). The next big downside zone is 1670-1700 (see daily chart below). If price bounces, then resistance should be near 1820.
1/31 – Gold has been churning sideways since the breakdown in early January and strength has been capped by the 8/12 low. If gold is going to break down, then I’d think that it’s from current levels since 2021 VWAP has been resistance for the last few weeks (see futures chart below).
SPOT GOLD DAILY
EURUSD WEEKLY
EURUSD has reached the 1.1960s, which is marked by the top side of the 2008-2014 line and center line of the channel from the March low. It’s important! I’m ‘thinking’ some consolidation / bounce here before the level gives way. Recall that the rally from March is in 5 waves so a move back to the former 4th wave low at 1.1603 is suggested (as per wave guidelines…see the 4 hour chart below). Proposed resistance is now 1.2000/25. The top of this zone is the center line of the Schiff fork from the high (red line on the hourly chart…2 charts down). That line has been support/resistance for the last week.
2/1 – EURUSD finally appears ready to accelerate lower. 1.1960s or so is well-defined as possible support however. The level includes the top side of the line of of the 2008 and 2014 highs, center line of the channel from the March high, and resistance from August (weekly chart is below). On a shorter term basis, there is also the lower parallel of a Schiff fork.
EURUSD 4 HOUR
EURUSD HOURLY
USDJPY DAILY
USDJPY is ticks away from 105.60s. Possible resistance for a pullback extends into 106.00ish, which is the 38.2% retrace of the decline from the March high. The level has served as an important pivot since last May and is also defined by a median line from a multi month bullish fork (see 4 hour chart below). If a pullback occurs before 106.00 then proposed support is 105.17.
1/31 – USDJPY focus remains on 105.13 and 105.60. 105.13 is where the rally from the low would consist of 2 equal legs. 105.60s is the 200 day average and November high. The top side of the line from the March high should provide support if reached. That line is about 104.10 now.
USDJPY 4 HOUR
USDCHF 4 HOUR
USDCHF has followed through on its head and shoulders pattern and near term upside focus is .9110; the 161.8% extension of the first leg up and the trendline from the March high. If price pulls back from nearby then support should be .8980-.9010.
2/1 – Not surprisingly, USDCHF also sports the inverse head and shoulders pattern since mid-December. Price could pull back from near .8980 but the objective from the pattern is .9080. January’s low could be significant however given the 2 month volume reversal in FXF (Swiss Franc ETF…see below).
NZDUSD 4 HOUR
Kiwi action has been subdued the last few weeks but that could change soon. .7120 is huge. The level is defined by the confluence of the line off of the March and November lows and the center line of the channel from the high. A break below that level would likely lead to accelerated weakness. In the interim, .7180s is possible resistance.
1/28 – NZDUSD is sitting on an key technical level defined by a line that connects highs and lows since July. A break below could ‘open the floodgates’. Near term risk is well-defined with price turning down from 2021 VWAP and VWAP from the high (see futures chart below.). A daily close beneath the noted line (red line) would warrant action.
