News and Analysis

Market Update 11/1 – EURJPY Elliott Pattern and Trade Idea

GBPUSD 4 HOUR

Cable near term downside focus is 1.3570s, which is the 61.8% retrace of the rally from the September low and the July low.  It’s also the center line from the Schiff fork that originates at the May high.  Resistance should be 1.3709.

010/27 – The short GBPUSD setup is valid following the drop under the short term support line.  Proposed resistance is 1.3770s and the downside swing target is 1.3650.  This is purely a levels play and don’t forget that VWAP resistance is above price along with the 200 day average.  Finally, note that GBPJPY reversed lower from it’s pre-Brexit day close over 5 years ago (see below).

USDCHF DAILY

USDCHF is testing an important level right now.  The level in question is the bottom of the channel that originates at the January low.  Tops this year were made right at the center line.  That’s usually a good indication that channel support will hold.  If it does hold, then resistance is probably near .9200.

10/26 – Near term USDCHF levels are well-defined for those wanting to play a range.  Proposed resistance is .9240s but the more important spot to know is .9100, which is channel support and lows from mid-late August.  The bottom of the channel is important because the July and September highs occurred on the channel center line (see the daily chart below).

USDZAR DAILY

USDZAR has broken out!  The setup is to buy a pullback into 15.1950s or so.  Upside focus is 16.08.

10/28 – Is this a year long head and shoulders bottom in USDZAR?  Price is testing the neckline now.  Price is also testing the center line of the channel from the June low.  This confluence (neckline and center line) constitutes an ‘energy point’, which warns of increased volatility.  If price breaks higher then my preferred method of entry is to buy a pullback to the top side (as outlined with the arrows).

EURJPY 4 HOUR

Action since the October high in EURJPY is probably a 4th wave.  As such, expectations are for a 5th wave rally to a new high.  A possible target is 134.29, which is the 61.8% retrace of the 2014-2016 decline and where the rally from the May 2020 low would consist of 2 equal legs.  Watch for support near 132.00.