USDOLLAR found resistance at the cited level (recovery high was 12536) and broke down today. Individual USD crosses nailed their supports as well (see levels noted below from last week). My wave count interpretation is that weakness from the 5/18 high is either a 3rd or C wave so downside potential is significant in the coming weeks and months.
Risk sensitive currencies such as the Australian dollar, New Zealand dollar and Canadian dollar gained ground in early Tuesday trading as hopes grew over global economic recovery from the fallout of the COVID-19 pandemic. Positive coronavirus vaccine news and indications that global economies are slowly reopening helped to buoy investor mood.
It ‘feels’ like the USD is on the verge of breaking down. That said, USDOLLAR is back into important support (line off of 2011 and 2014 lows and a major horizontal level…see weekly chart below). Support is support until broken so respect bounce potential with resistance near 12520.
Resistance came in slightly higher than thought for GBPUSD but the idea remains the same. Proposed support for long entry is 1.2160/90s. The bottom of the zone is the 61.8% retrace of this week’s rally and 4/6 low. The top of the zone is VWAP from this week’s low (see hourly futures chart 2 charts down). Additional bullish evidence includes a daily volume reversal yesterday (see daily futures chart below). The last daily volume reversal was in January 2017, which was an important low. Also, don’t forget seasonal tendencies are now bullish. Elliott structure suggests that the rally from this week’s low is either a C wave or 3rd wave, so upside potential is significant.
The downside remains favored in AUDUSD towards the .6250s. The former 4th wave low is .6254 and VWAP from the March low is currently .6249. This is also the lower parallel of the bearish fork from the high. If AUDUSD is bearish then resistance should be about .6460, which is the underside of the line off of the 4/21 and 5/6 lows and VWAP from the April high. Seasonal tendencies are bearish for the next few weeks (see below).
Daily trading analysis video with Jamie Saettele (13/05)
ES broke the noted level at the end of the day. 2885 is now resistance if reached and general focus is towards the 2637/97 zone (yellow box). The bottom of this zone was resistance in March. It’s also the 38.2% retrace of the decline from the February high. The top of the zone is VWAP from the low and the 3/13 high.
The S&P (looking at SPY here) remains magentized to the 61.8% retrace of the decline from the high. This is also the September 2018 high and May 2019 high (that’s right…exactly flat over the last year). Good spot to turn down?
Since reaching the long term parallel (magenta line) on 4/13, gold has traded sideways. Price rolled over last week from short term trendline resistance so be aware of the lower boundary near 1683. A break below there would leave price action since 4/13 as a consolidation top. Immediate downside focus would then be the 3/31 low at 1576.