EURAUD sports a 2 month bottoming pattern (similar to the 2 month topping process in AUDJPY). Price is nearing the 3/15 high at 1.5329 which could produce a reaction lower. ‘Ideal’ support for a long entry is 1.4940s, which includes former resistance and the top side of the line off of the 3/15 and 4/25 highs.
EURUSD appears to be completing an A-B-C decline from the 1.1185 high. The decline would consist of 2 equal legs at 1.1017 and the 61.8% retrace of the latest leg up is 1.1038. The lower parallel from the short term bullish fork is in line with these levels. Bottom line, look slightly lower before the next leg up gets underway.
It’s been a little over a week since EURUSD made the low at 1.0806…right on the trendline from the 2017 low. The pullback from the 3/10 high appears in 3 waves and price has held the 61.8% retrace of the rally from the low…so far. I want to see strength above 1.1011 (high volume level) before committing to the long side with initial focus at 1.1215/30, which is 2022 VWAP, the month open, and 2 legs up from the low. FOMC is tomorrow so hopefully we get clarity regarding broader reversal prospects after tomorrow!
AUDUSD is pressing against the trendline from the October high. The center line of the short term bullish fork is also in the vicinity. A break above the trendline opens up the January high at .7314 and possibly the confluence of the upper parallel from the bullish fork and trendline from February 2021 near .7440.
EURUSD has broken out and upside focus is squarely on 1.1660s. This is the 200 day average and August low. 1.1355/80s is well-defined for support now. The zone was resistance in December and is also the top side of the former resistance line that was just broken.
Gold cut through the proposed support zone with ease has already reached the lower parallel of the Schiff fork from the August low. This is ‘last chance’ support for gold in my opinion. If price doesn’t hold here then there is no reason from my vantage point to consider the long side. 1830 is now resistance on a bounce.
I have not been ‘in tune’ with USD moves for the better part of the last month. During periods of uncertainty, I find it helpful to go back to the basics. USDSEK is often a ‘tell’ for general USD trends and pivots. Here are several objective technical observations;
USDSEK is holding the 200 day midpoint (similar to the 200 day average)…this is bullish.
The decline from the 8/20 high is in 2 equal legs…this is characteristics of a corrective decline within a larger advance…bullish
Daily RSI registered ‘overbought’ readings at price highs over the last year and RSI readings at price lows have been above 30…this is also bullish.
In summary, the weight of evidence is USDSEK bullish and therefore generally USD bullish (notably against European FX). At least that’s where my mind is at the moment.
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.
DXY and USDOLLAR remain in flux (one more push higher as per the 4th wave interpretation?…see yesterday’s post) but EURUSD action from the low is constructive. Price rallied in 5 waves and declined in 3 waves therefore I lean towards the long side against 1.1772. Also, don’t forget that Euro futures are holding VWAP from the March low (see below).