News and Analysis

Market Update 3/2 – AUDUSD Median Line Trade Setup

SPX DAILY

The 2/24 low has remained in place and SPX is nearing its first ‘real’ test on the upside.  That test is 2022 VWAP at 4430.  After that, the trendline and 200 day average is about 4465.

2/24 – Today was a classic ‘sell the news’ day with the news being Russia attacking Ukraine.  A more accurate term is ‘fade the news’.  SPY carved a high volume reversal.  We saw one of these at the 1/24 low.  Prior to that, you’ve got to go back to 2018.

DJI DAILY

The market continues to follow 2018 action.  If this continues then the market will continue higher into early next week before rolling over.  The upper parallel from the Schiff fork is about 35300 on Monday.

2/22 – The ‘Dow’ has come into the median line of the Schiff fork that originates at the 2009 low.  This line has produced a lot of pivots.  Interestingly, price action is similar to 2018 (see next 2 charts).  If the comparison holds, then we’re due for a squeeze…maybe back to 35630 or so.

EURUSD DAILY

EURUSD carved a doji today and once again held the top side of the trendline from the 2014 high.  This is reason enough to take a bullish stand against the low.  The high volume from today at 1.1103 is proposed support.  The first level to pay attention to on the upside is 1.1218/30 (month open and former support).

3/1 – For all I know, EURUSD is going to completely fall apart but that hasn’t happened yet.  In fact, today’s low is right at the top side of the trendline from the 2014 high…again!  The November and January lows were at this line so why not again?  Also, don’t forget that DXY is pressing against the 61.8% retrace of the decline from 2020 (see below) and DXY didn’t make a new high today.  The non-confirmation is subtle but a non-confirmation nonetheless.  Finally, FXE (euro ETF) made a high volume down day today.  If we get a high volume up day tomorrow then we’ll an objective reason to turn bullish.

GBPUSD 4 HOUR

Cable reversed sharply higher today.  The low was 4 pips from weekly reversal support (week of the low close from December).  The decline from January channels perfectly and the parallels within the channel can be used as proposed support/resistance.  Initial upside focus is the center line near 1.3430 followed by former support at 1.3490.

AUDUSD DAILY

AUDUSD broke above the median line today so longs are in play.  The top side of the median line is proposed support now (formerly resistance) near .7265.  This is also the year and month opening prices.  One benefit to trading with median lines are tight stops.  That’s especially useful in this instance given the proximity of the January high and 200 day average as possible resistance.  Upside focus is .7370 followed by .7420s.

3/1 – I remain constructive AUDUSD but prefer to wait for either .7170 support or a clean break (daily close) above the median line before going long.  Stay tuned.

USDCAD 4 HOUR

USDCAD action since August may be a triangle.  Under this scenario, price would drop to 1.2560 or so before turning higher again.  In the meantime, 1.2680 is well-defined for resistance.  This is 2022 VWAP and former support.