It’s clear that the USD won’t roll over until/unless rates stop going up. TLT is the long bond ETF, which moves inversely to rates. So, a turn higher in TLT means a turn lower in rates. This could happen soon because TLT is closing in on a massive level defined by 2 legs down from the August 2020 high (using this high rather than the COVID spike high…the August high is the daily and weekly closing high) at 119.94. It’s also the 25 line within the channel from the 2007 low. This line nailed the 2013 and 2018 lows. Finally, the decline channels. If we do get a reversal then there should be a USDJPY play.
DXY printed 100.52 today and then carved a key reversal. In fact, UUP (USD ETF) made a high volume reversal (see below). The combination of the wave count, measured level (recall the 100.59 measurement), upper channel line, and volume reversal make a strong case that the USD topped today.
USDCAD has reached the level noted for resistance. This level is huge. It’s defined by VWAP from the March high, 200 period average on the 4 hour chart, underside of the trendline from the 2021 low, and year open! My ‘guess’ is that price rolls over but I need a response, such as a price and/or volume reversal, in order to short. Stay tuned.
The ‘final leg higher’ option is unfolding in DXY. A key zone to pay attention to is 100.39/59. This is a well-defined horiztonal and where wave 5 would equal wave 1 within the sequence from the January low. Also, note that EURUSD has yet to trade beneath its March low. It may very well do so but a non-confirmation is in place until that happens.
I’m torn on Kiwi given the prospect for a deeper AUDUSD pullback. In any case, continue to be aware of the long term neckline (blue line), which has been resistance and support so far in 2022. The line is about .6890. If we get a decent reaction at that level, then it will be worth taking a shot on the long side with a tight stop.
Today’s post is extremely short as I’ve been having tech issues throughout the day.
Tuesday’s Aussie spike on ‘news’ (RBA) has top written all over it. Price spiked into and reversed from a well-defined level (61.8% retrace of the decline from the 2021 high and former support) following RBA. Perhaps we’ll finally get the pullback into the top side of former trendline resistance (blue line), which is near .7375 now.
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.
1.1218/30 remains in focus but I’m wondering if EURUSD is trading within a much more bullish structure. Notice how price has been riding the median line of the presented fork the last 2 days. This suggests that the structure is ‘in play’. So, either price pulls back and finds support on a related parallel…probably near 1.1106 or 1.1060 or EURUSD explodes higher now. If the latter happens, then the top side of the center line becomes proposed support.
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.
The triangle scenario described last week is no longer valid in BTCUSD. However, note that price has reached the 200 day average and the upper parallel from the median line of the fork that originates at the April 2021 high is slightly higher…near 49500. Pay close attention to that level for resistance if reached because since the January low registered right at the median line.