Market Update 11/3/2021 – Crude Breaks Down

CRUDE OIL FUTURES (CL) 4 HOUR

Crude traded up to 84 (a bit above) and has gone straight down since.  82.20 is now proposed resistance if crude bounces.  Downside focus is the July high at 76.98 and possibly the top side of the LONG TERM former resistance line (now support) near 73.  The weekly chart below shows the this long term chart in its entirety.

10/27 – Crude also traded sharply lower today.  The lower channel line is now about 80.78, which is in line with the 10/20 and 10/21 lows.  As long as that level holds, then it’s proper to maintain a constructive view.  However, the bigger risk is lower given the recent euphoria regarding the energy rally.  Watch for resistance near 84.

CRUDE OIL FUTURES (CL) WEEKLY

COPPER FUTURES (HG) DAILY

Copper reacted to the top side of former trendline resistance so I’m thinking bounce.  The 200 day average is also just below the market.  Pay close attention to 4.6155-4.6275 if reached for resistance.  This is the 61.8% retrace of the decline and July high.

10/27 – Copper tanked again today and is fast approaching the key level noted last week, which is the top side of former trendline resistance.  That line is about 4.33 now.  A break below that line would start to suggest a double top with the May and October highs.

USDOLLAR 4 HOUR

I was ‘hoping’ for clarity regarding the USD after FOMC.  I’m still not confident in direction but the wave count shown does make sense…5 down and 3 up into the 61.8% retrace with a reversal.  Good enough for me.  Bottom line, I’m looking lower in USDOLLAR (and therefore the USD) for now.

11/2 – Clarity is lacking ahead of FOMC as it pertains to general USD direction.  The ‘break’ lower in the USD last week proved false but one can make the case that action since September high is 5 waves down and 3 waves up.  The rally has retraced 61.8% of the decline too so it’s possible that price resumes lower now.  Confidence in direction is extremely low right now.  Hopefully, this clears up post-FOMC.

EURUSD DAILY

In light of yesterday’s long term EURUSD pic and today’s USDOLLAR analysis, I’m willing to trade EURUSD on the long side.  1.1580/90 is proposed support.  The big test for bulls is still 1.1700.  I’ll have more to say if this starts to play out.

11/2 – The near term picture for EURUSD is a mess but don’t forget that price continues to hold the 200 week average and a well-defined long term horizontal zone.  As such, any near term developments would be viewed with increased interest.  At this point, that would mean establishing above 1.1700.  For now, I see nothing to do.

GBPUSD 4 HOUR

BoE is tomorrow and I’d love a chance to buy into the noted 1.3570s.  If that’s going to be reached then 1.3709 remains ideal resistance.  Perhaps we get a tag of resistance followed by a knee-jerk reaction lower in GBPUSD before price resolves higher?!

11/1 – 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.

NZDUSD 4 HOUR

The recent NZDUSD low fits best as wave 4 within the 5 wave rally from 9/30.  The implication is that Kiwi trades to a new high with wave 5 resistance near .7260 (upper channel line).  If this is going to play out then support should be .7150.

11/2 – I’m paying closer attention to Kiwi right now than Aussie due to the top side of the line off of the February and May highs.  This line was resistance in September and is now in line for support near .7050.  Essentially, the top side of the trendline is the re-test level in order to position to a much bigger upside move.

AUDUSD HOURLY

AUDUSD didn’t quiet make it to .7400 before rebounding today.  Unlike NZDUSD, the drop from the top can be counted as an impulse.  As such, I’m wondering if Aussie bounces but fails near .7500 (61.8%) while NZDUSD makes a new high.  This would set up a non-confirmation and reversal setup…something that would be expected in a confusing market.

11/2 – Aussie has pulled back sharply from the well-defined .7530/60s zone (too bad we didn’t get one more push higher before this drop).  Pay close attention to .7400 for possible support.  This is an important slope confluence and VWAP from the September low (see below).