News and Analysis

Market Update 4/7 – Know this Key DXY Level


The 61.8% retrace nailed the lower high and crude is closing in on the 3/15 low.  Be aware of the line that crosses the 2021 highs (red line).  This is proposed resistance near 100.50-101.00.  Notice that price has been riding the median line of a Schiff fork.  This is important because a break below the median line would indicate a likely acceleration lower towards the lower parallel…currently in the low 80s.

3/21 – After plummeting under $100, crude is nearing the 61.8% retrace of the decline at 115.70.  There are also several highs/lows near this price from early in the month.  My view remains that we saw a massive blow-off top so watch for resistance and a lower high.


The ‘final leg higher’ option is unfolding in DXY.  A key zone to pay attention to is 100.39/59.  This is a well-defined horiztonal and where wave 5 would equal wave 1 within the sequence from the January low.  Also, note that EURUSD has yet to trade beneath its March low.  It may very well do so but a non-confirmation is in place until that happens.

4/4 – It’s possible of course that the DXY rally ended on 3/28 with a truncated 5th wave but it’s also possible that a final leg higher is in the works.  I have to respect this latter potential because price didn’t hold below 98.70.  EURUSD looks quite different and I don’t have an opinion there at the moment.  Continue to focus on USDSEK though and specifically the median line for resistance (see below).  In fact, I can envision a scenario where the final DXY high is put in with USDSEK at the median line.  If this happens, then we’d have a drastic non-confirmation (divergence).

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This is from the Long Term update earlier today.  “Everything since the 2017 low may be a triangle in which case EURUSD is probably completing wave D now.  The implication is that price turns up in an E wave and rallies back to 1.1850 or so.”  The lower trendline is about 1.0835.


The median line (red line) remains key for resistance.  That line is about 9.64 now.  However, also pay attention to 9.54/57.  This zone is defined by the 38.2% retrace of the decline from the March high, 3/28 high, and 2 equal legs up from the March low.  Again, I think that USDSEK holds the key to when the USD starts to broadly decline (notably EURUSD advance).

3/21 – Pay attention to USDSEK, notably the underside of the median line, which has been precise resistance for nearly a year.  The median line is now about 9.5650.


All eyes on 1.2635 or so for USDCAD resistance!  The rally from the 4/5 low is clearly impulsive but the rally could complete a flat correction from the 3/30 low.  Canadian jobs data is out tomorrow so we could get a spike into resistance before lower.  I love ‘news fade’ setups…Aussie on RBA earlier this week is a great example.

4/6 – USDCAD appears well on its way to test the noted and well-defined 1.2620s resistance.  In fact, VWAP from the March high is closing in on that level as well.  Watch for support near 1.2510 now.