Market Update 1/24 – Risk Reversal Provides USDCAD Setup

SPX HOURLY

SPX took out the October low before staging a dramatic reversal and closing slightly higher on the day.  I’m watching for resistance near 4480.  This is the underside of the former corrective channel…the line was resistance on Friday.  From an Elliott perspective, my view is that this is a 4th wave rally.  The implication is that price tests today’s low (late this week or early next?) in a 5th wave drop.

DOW HOURLY

The Dow took out the June low before reversing higher.  This is a close up view of the median line from the Schiff fork off of the 2009 low (longer term chart is below).  Remember, were looking for support at that level.  Today’s low is just above the line.  Like the S&P, my view is that today’s low is the end of a 3rd wave and that this is a 4th wave rally.  Proposed resistance is about 34900.

1/19 – The Schiff fork from the 2009 low in ‘the Dow’ is a thing of beauty.  The only time that price traded outside of the structure was in early 2020 (COVID crash).  Even then, the low registered at the full extension of the channel.  Not withstanding a period of back/fill, the major level to pay attention to now is the median line near 33000.  A zoomed in view is below.

DOW DAILY

BTCUSD DAILY

BTCUSD low today is right at the median line from the fork that originates at the April high.  This is a great spot for a bounce.  42000-43000 is proposed resistance.  Watch for support near 34500.

EURUSD 4 HOUR

EURUSD continues to respect the channel from the November low.  I remain constructive but would prefer strength above 2022 VWAP (1.1350) before committing to the long side.  Look towards 1.1380s in the near term.

1/20 – EURUSD is at proposed support (1.1300).  This level obviously has to hold in order to maintain a constructive view.  If we get a decent reaction then I’ll navigate for entry.

USDJPY 4 HOUR

USDJPY focus remains on 112.50 or so.  Price has been riding along the center line of the channel from the high so watch for resistance from the upper parallel near 114.40.

1/18 – USDJPY spiked above the noted line off of the September and December lows but closed just under the line.  As such, I’m thinking that today’s high is a lower high within a bearish sequence from the 1/4 high.  Focus remains on 112.20/50.

USDCAD 4 HOUR

USDCAD ripped into the upper parallel of the multi month bearish fork today and turned lower.  Resistance is also defined by VWAP from the high and the 50 day average.  Given the level, I’m looking for USDCAD to trade lower.

NZDUSD DAILY

NZDUSD tagged channel support today.  This channel nailed the December low.  Also, AUDUSD has not dropped to a new low so we have the non-confirmation between NZDUSD and AUDUSD that is often present at important turns in both currencies.  My ‘gut’ says that Kiwi put in a low today but I don’t see a setup for entry yet.