The short term median line continues to act as resistance and the 25 line continues to act as support in DXY. If price fails to hold here then the 61.8% retrace at 89.87 is possible support. The upper parallel from the Schiff fork off of the March high was resistance last week. A break above would be significant. Until then, the USD bounce is just that…a bounce.
BTCUSD made a 2 bar weekly volume reversal last week. TradeStation historical is limited but this is the 2nd 2 bar weekly volume reversal since 2019. The 2019 signal identified an important top. Bitcoin news mentions have also gone parabolic (see below). This isn’t a surprise but it’s comforting to see the data. In other words, the speculative excess isn’t anecdotal.
DXY has reached a possible pausing level. The level in question is defined by the 200 period average on the 4 hour chart and the median line from the structure that originates at the 12/17 low. If price does pull back, then I’ll zoom in to identify possible support. If price zooms through this level then the top side of the median line becomes proposed support.
Bitcoin! There aren’t enough superlatives to describe the recent rise. That said, pay attention at this level. Yesterday (first trading day of the year), BTCUSD completed a 2 day volume reversal. This means that the price rallied on significant volume and declined on significant volume the very next day. BTCUSD price history on TradeStation starts in August 2011 so this ‘study’ is in no means exhaustive. Still, the only other 2 day volume reversal occurred at the June 2019. Price is also at the top of an extremely steep channel so I’m on alert for something else besides parabolic rally.
DXY is trading in a tight holiday range. Strength above the 12/21 high of 91.02 is needed in order to suggest that a low (maybe wave 5 of 5) is in place. A longer term chart is shown below. The recent low is a few ticks above the March 2009 high…good spot for a low. 95.00ish is eventual resistance.
DXY is up sharply in early week trading, raising the specter that wave ‘5 of 5’ is complete at last week’s low. If the rally stretches into 5 waves, then focus will be on buying a small pullback for what likely proves to be a multi-month rally in order to correct the entire decline from the March high. Stay tuned.
old pulled back to 1819 before resuming higher. The next level of interest is 1921/30. This is the 2011 high, 2 legs up from the low, and a slope confluence (short term bullish upper parallel and medium term bearish upper parallel).
DXY nearly reached 90.02 today. Low was 90.13 and price reversed until FOMC, after which the buck was no longer allowed to rally. I maintain that reversal risk is high from this level (90.02). Note also the blue lines that connect lows since October 2019.
Silver has been trading within a downward sloping channel since the August high. The 11/30 low was right at VWAP from the March low (see SLV chart below), so bullish risk is against Monday’s low. Near term, watch for resistance near 25.07/56. Eventually, focus will be on identifying a higher low against Monday’s low.