News and Analysis

Market Update 3/16 – Key USDSEK Development

SPX DAILY

SPX followed through on the bullish outside day but big levels are in store, notably 2022 VWAP and the trendline at 4294.  Let’s see what happens there but I’m ‘thinking’ that the SPX trades off of the well-defined level.

3/2 – 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.

DJIA DAILY

Heads up for 34665 or so in the Dow.  This is the 12/20 low, 50 day average, and underside of former trendline support (red line).  In fact, a tag of this line would be nothing more than a re-test of the expanding wedge.

EURUSD 4 HOUR

The move above 1.1010 registers as a ‘breakout’ for EURUSD.  The high volume level is now 1.1018 (from early U.S. trading….not FOMC), which is now proposed support.  Initial upside focus is the mentioned 1.1215/30.

3/15 – It’s been a little over a week since EURUSD made the low at 1.0806…right on the trendline from the 2017 low.  The pullback from the 3/10 high appears in 3 waves and price has held the 61.8% retrace of the rally from the low…so far.  I want to see strength above 1.1011 (high volume level) before committing to the long side with initial focus at 1.1215/30, which is 2022 VWAP, the month open, and 2 legs up from the low.  FOMC is tomorrow so hopefully we get clarity regarding broader reversal prospects after tomorrow!

USDSEK DAILY

USDSEK held up for 2 days before crashing though the median line today.  The drop under the median line is a key bearish development for the USD generally.  The underside of the line is now resistance…as it was in June, July, August, November, January, and February.  That’s currently about 9.56.  The next downside test is 9.15/18 (lower parallel and former resistance).

3/14 – The median line noted last week was reached today in USDSEK.  This is possible support for a corrective bounce with initial resistance at 9.77 (see hourly chart below).  If price does break down now, then the underside of the median line becomes ideal resistance.  Under ‘normal’ correlations, I’d think that EURUSD remains weak given that USDSEK is at support.  However, current conditions are anything but ‘normal’ so I’ll refrain from assumptions.  Bigger picture, USDSEK did complete the weekly reversal signal explained last week (see 2 charts down).

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AUDUSD 4 HOUR

AUDUSD continues to follow the (bullish) script.  Our limit was hit today on the trendline test but the high volume level at .7262 is proposed support for re-entry.  The trendline from the February 2021 high remains possible resistance near .7400 but a break above there would indicate a critical behavior change (extremely bullish and no reason to ascertain targets at this time).

3/15 – The AUDUSD drop is in exactly 2 equal legs.  Price has also held the short term trendline, the decline channels in corrective form, and Aussie is trading around 2022 VWAP.  This is a great place for a turn higher.  Short term channel resistance is possible resistance near .7290.