.7100 might be in play again for NZDUSD. The level has been a pivot since December. It’s also near the 25 line within the channel from the February high. Since the 75 line was support (twice), we should expect resistance near the 25 line (median line symmetry!). .7100 is also the 200 day average.
The most recent Economist cover highlights emerging market struggles. Again, check out the post in the link above for an explanation on why magazine covers are useful contrarian covers but the bottom line here is that EM (I’ll dig into EM equities and FX more in the coming days) is ‘sold out’.
GBPUSD hasn’t quite reached 1.4000 (high today was 1.3982) but the upper parallel was reached. I am on reversal watch in Cable right now…especially given bearish seasonal tendencies over the next few weeks (see below).
7415 has been discussed in these pages for months. That level is now reinforced by the 20 day average and a short term trendline. Also, the rally from the low would consist of 2 equal legs at .7427. If a strong downtrend is underway, then .7415/30 (or so) should provide resistance. The chart below shows price with a rolling 20 day midpoint. Notice how the 20 day midpoint acts as support or resistance during strong trends.
Focus remains higher for EURUSD following today’s hold. In fact, price pulled back to noted support and immediately turned higher. FOMC is tomorrow. The only reason I mention that is because of the potential for increased volatility. Even if you told me what Powell would say tomorrow, it wouldn’t matter. Only the reaction matters! Bottom line, price has held support (for now at least) so I’m looking higher towards the well-defined 1.1950/90 zone.
EURUSD has been churning near lows for weeks, putting in divergence with RSI on both the daily and 4 hour time frames. The break above the line from the 6/25 high warrants a long position. Watch for 1.1780 support. General focus is the center line and 25 line within the channel from the February high near 1.1930 and 1.2070 (also the 61.8% retrace).
USDOLLAR put in a key reversal today after hitting parallel resistance from the pitchfork that originates at the 2017 high. I’m not sure that there is a better example of median line symmetry. Over the last 10 months, highs and lows have registered on parallels equidistant from the median line. With the specter of 5 waves up from the May low, I lean towards USD weakness from the current level.
Yen crosses reversed higher today. Expanding on the implications from the Nikkei bear trap, GBPJPY tagged the 3/24 low today before reversing higher. Price also held trendline support. I’m constructive towards 150.74-151.31 (former lows).
We got the leg up in USDOLLAR and price has entered the a possible resistance zone. My ‘base case’ is that price does pull back before resuming higher. Keep it general for now regarding USDOLLAR.