NZDUSD levels are actually better defined than AUDUSD in my opinion for support. Price has already reached 2 equal legs down at .6746 and the well-defined .6700 is just below. This is defended by the trendline from the lows and 2022 VWAP at .6719. Bottom line, .6700/50 is a big zone and well-defined for support. I’m looking for Kiwi to turn up and begin another leg higher within the bull cycle from the January low.
AUDJPY action since last May is an ascending triangle. The pattern portends a bullish outcome. What’s more, the cross is historically a decent barometer of risk appetite. Well, equities have been slammed for months yet AUDJPY is pressing the highs. This alone is reason to suspect an imminent breakout. A breakout occurs above 86 and would target the September 2017 high at 90.30 initially.
That was a blowoff top in crude oil. Interestingly, resistance came in at the same parallel that nailed the Gulf War high in 1990. I’m not going to get into detail on the near term charts just yet other than noting 97.60s for support and 115.50 for resistance. Also, USO completed a high volume 2 day reversal. This last happened in September 2019 (see below).
FXE (euro ETF) completed a 2 day volume reversal today. This means that the prior day was a high volume down day and today was a high volume up day. Previous instances are highlighted. Most signals have been reliable. Near term, the important test remains the upper parallel from the short term fork, now near 1.1040. If EURUSD is going to recover then I’d think that 1.0885 provides support.
EURUSD has cut through everything that I thought would provide support and price has now reached the line off of the 2017 and 2020 lows. If this doesn’t hold then I guess there is nothing until the March 2020 low at 1.0636. Near term (see below), price has responded to the lower parallel of the fork from the 2/10 high. The important test on the upside (if price bounces of course) is about 1.1060. Finally, daily RSI is below 23. Previous instances over the last 5 years are shown 2 charts down.
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Consider today’s update the ‘long term trendline edition’. NFP is tomorrow and I’ve witnessed many turns from stretched markets over the years following an NFP spike. In this instance, that would be a spike towards USD strength (EURUSD weakness). Interestingly, EURUSD is closing in on a 22 year trendline! This is the same trendline that was support for the 2020 low. A close up is below…the trendline is about 1.1000/20. This is also the 78.6% retrace of the rally from the 2020 low.
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.
Silver broke above its 13 month channel today to join gold. The top side of the channel at 24.87 is now support. The objective is the 2021 high and full channel extension at 30.14. Gold support should be 1922/28 now.