News and Analysis

Market Update 5/6 – USDOLLAR NFP Reversal Warning

WHAT IS HAPPENING?

No bubble here…the coming crash in crypto is going to look like the crash after Tulip mania in 1636/37.

TULIP MANIA

USDOLLAR HOURLY

A print under 11745 in USDOLLAR will complete 3 waves down from the 5/3 high and give way to another leg up…at least that’s what I’m thinking.  Reminder, NFP is tomorrow!

5/4 – The latest USDOLLAR note (5/2) remarked on longer term observations.  Near term, pay attention to 11840s.  This is the 61.8% retrace of the decline from 4/1 and where the rally from 4/29 would consist of 2 equal legs.  The 200 day average (not shown) is just above there as well.

SPOT SILVER DAILY

The silver rally from 3/31 is nearing the 61.8% retrace of the decline from 2/1 at 27.71.  The level is also defended by pivots since September 2020.  Bigger picture, price has traded sideways since August 2020.  If this broad range is going to remain in place (as opposed to a breakout and directional move) then a turn lower from 27.70s ‘makes sense’.

NZDUSD HOURLY

Kiwi continues to trade around the center line of the channel from the April low.  Also note daily reversal resistance at .7242.  It’s still unclear to me whether or not the drop from 4/29 is impulsive or corrective.  The same goes for the rally from 5/4 (impulsive or corrective).  As such, simply focus on levels for now….7242 for resistance and .7170s for support.

5/5 – NZDUSD did hold support so it’s possible that the next leg up within a bullish sequence from the April low is underway.  Bullish Kiwi doesn’t make sense to me given several factors, including seasonality and general USD support.  However, price is king so at least consider a bullish stance against .7115.  Price is at resistance now so allow for a pullback.  Proposed support is .7150.

USDJPY 4 HOUR

USDJPY remains confined to the channel from the January low.  Focus is on the lower parallel near 108.40.  A break below there would suggest a deeper drop is under way from the March high.  Until then, play the range.

5/3 – What a beauty!  USDJPY nailed resistance and reversed immediately.  It’s best to play the range within the channel until price breaks the channel.  The lower channel line is 108.15/30.