Education
March 29, 2022
FXY (Japanese Yen ETF) completed a 2 bar volume reversal today. I’ve highlighted all of the bullish reversals since 2016. All but one of the signals nailed the turn. Signals on the other side were reliable as well. Be aware that this chart plots JPYUSD so bullish signals are bearish USDJPY signals. On the spot chart (see below), 123.15/50 should provide resistance if a tradeable high is in place. The top of this zone is VWAP from the high, which has proved useful so far in identifying resistance. The next levels of interest on the downside are 121.40 and 120.40.
March 23, 2022
GBPUSD has already followed through on last week’s reversal. This is somewhat frustrating because we didn’t get a chance to buy proposed 1.3080/90 support. In any case, support now should be 1.3194-1.3210. The big test on the upside (near term at least) is 1.3360. This is the January low and 200 period average on the 4 hour chart.
March 17, 2022
USDSEK held up for 2 days before crashing though the median line today. The drop under the median line is a key bearish development for the USD generally. The underside of the line is now resistance…as it was in June, July, August, November, January, and February. That’s currently about 9.56. The next downside test is 9.15/18 (lower parallel and former resistance).
March 15, 2022
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!
March 11, 2022
AUDJPY action since last May is an ascending triangle. The pattern portends a bullish outcome. What’s more, the cross is historically a decent barometer of risk appetite. Well, equities have been slammed for months yet AUDJPY is pressing the highs. This alone is reason to suspect an imminent breakout. A breakout occurs above 86 and would target the September 2017 high at 90.30 initially.
March 9, 2022
That was a blowoff top in crude oil. Interestingly, resistance came in at the same parallel that nailed the Gulf War high in 1990. I’m not going to get into detail on the near term charts just yet other than noting 97.60s for support and 115.50 for resistance. Also, USO completed a high volume 2 day reversal. This last happened in September 2019 (see below).
March 9, 2022
FXE (euro ETF) completed a 2 day volume reversal today. This means that the prior day was a high volume down day and today was a high volume up day. Previous instances are highlighted. Most signals have been reliable. Near term, the important test remains the upper parallel from the short term fork, now near 1.1040. If EURUSD is going to recover then I’d think that 1.0885 provides support.
March 7, 2022
EURUSD has cut through everything that I thought would provide support and price has now reached the line off of the 2017 and 2020 lows. If this doesn’t hold then I guess there is nothing until the March 2020 low at 1.0636. Near term (see below), price has responded to the lower parallel of the fork from the 2/10 high. The important test on the upside (if price bounces of course) is about 1.1060. Finally, daily RSI is below 23. Previous instances over the last 5 years are shown 2 charts down.
March 4, 2022
Consider today’s update the ‘long term trendline edition’. NFP is tomorrow and I’ve witnessed many turns from stretched markets over the years following an NFP spike. In this instance, that would be a spike towards USD strength (EURUSD weakness). Interestingly, EURUSD is closing in on a 22 year trendline! This is the same trendline that was support for the 2020 low. A close up is below…the trendline is about 1.1000/20. This is also the 78.6% retrace of the rally from the 2020 low.