We look at how the world’s financial markets, particularly the North American currencies, such as the US dollar, Canadian dollar and Mexican peso, have responded and could react to leadership and policy changes in the United States following Biden’s inauguration.
BTCUSD bounced sharply today with stocks and commodity currencies…still all the same trade. Price could turn down right here, which is VWAP from the high and possible channel resistance. At minimum, risk is well-defined for those looking to position for downside in BTCUSD.
AUDUSD followed through on its daily reversal last week and ended up with a weekly volume reversal. The only other weekly volume reversal occurred at the January 2004 high. Price is bouncing from the 50 day average in early week trading. Proposed resistance is .7887, which is the 61.8% retrace of the decline and the center line of the Schiff fork from the March low (see below chart). The next downside level of interest is the lower parallel. That is currently near .7500.
EURUSD spiked into and reversed from the noted 1.2220. My view is that a 3 wave rally is complete from the February low and that either a 3 or 5 wave decline will draw price beneath the February low in order to complete the larger correction from the January high. Short term channel support for a bounce is about 1.2080.
AUDJPY is nearing the line off of the 2008 and 2016 lows. This line was support in October 2018 and resistance in early 2019 so watch for resistance there again. The line is about 85.80. Daily RSI is 83.6 (see the next 2 charts), which has only been reached once before, in December 2005. Price topped then and fell over 6 big figures in the next 2 weeks.
The recent GameStop ($GME) short squeeze situation dominated the news cycle for a few days in January and February this year and has been a recurring topic in the business and finance news journals.
NZDUSD has entered a massive zone (.7370-.7550). The bottom of the zone is defined by the November 2011 low and where the rally from the March 2020 low divides into Fibonacci proportion (2nd leg of the rally equals 61.8% of the first leg). The top of the zone is defined by the July 2017 high (also the 61.8% retrace of the decline from the 2011 high). RBNZ is tonight, which brings forth the potential for volatility and a reversal (or the beginning of a reversal process) from significant price levels.
Crude made a weekly key reversal last week at a defined level (underside of the trendline off of the 2016 and 2018 lows). This is also the level that provided resistance in 2015 before the plunge into the early 2016 low. The trend in the inflation trade (basically USD down) is strong but crude could come off from the current level.
1.2000ish remains a possible bounce level for EURUSD but I’d keep an eye on 1.2090-1.2100 for resistance now too. The level is defined by VWAPs from the November and February lows. These VWAPs were previously support. Now broken, watch the lines for resistance.
The Sortino Ratio shares many similarities with the Sharpe Ratio, except the Sortino Ratio offers much more insight into the risk associated with a given strategy or asset.
Scandinavian Capital Markets is a STP-ECN forex broker. Our company is built on extensive knowledge of the foreign exchange market, expertise in technology, and a commitment to creating trusted long-term relationships with our clients, institutional money managers and professional traders.
Support: support@scandinavianmarkets.com
Scandinavian Capital Markets SCM AB is a Registered Financial Institution with the Swedish Financial Supervisory Authority, Finansinspektionen, under No. 80438. Company Registration No. 556863-5972.
Scandinavian Capital Markets Ltd., company registration no. 700472, is regulated by Vanuatu Financial Services Commission.
All transactions on the currency spot market are speculative and all investments should be made using risk capital that is not crucially required. There may be a considerable risk of losses on the currency spot market and all transactions using Scandinavian Capital Markets SCM AB are at risk of capital loss. You should consider carefully whether such investments are appropriate to you, taking into account your financial assets. We advise everyone to seek independent advice regarding issues concerning investments on the currency spot market. No information on this website should be understood to constitute financial advice from Scandinavian Capital Markets SCM AB. It is published for information and marketing purposes. Scandinavian Capital Markets does not accept clients from the U.S., Afghanistan, Belarus, Burma, Burundi, Central African Republic, China, Congo, Cuba, Egypt, Guinea, Guinea-Bissau, Iraq, Iran, Indonesia, Lebanon, Lesotho, Libya, Malaysia, Maldives, Mali, Moldova, Nicaragua, Nigeria, North Korea, Pakistan, Russia, Somalia, Sudan, South Sudan, Syria, Tunisia, Turkey, Vanuatu, Venezuela, Yemen, and Zimbabwe. Scandinavian Capital Markets may reject any applicant from any jurisdiction at their sole discretion without the requirement to explain the reason why.