Bitcoin made a volume reversal today. The high was right at the top of a channel too. The longer term chart is extremely bullish but price could drop to back to 10,000 or just below and still be bullish on a longer term basis (see weekly chart below). Near term, the BTCUSD reversal lower doesn’t bode well for ‘risk assets’ in general. No, BTCUSD is not a ‘safe haven’. It’s been moving with everything else all year (see 2 charts down). The ONLY safe haven in the current environment is the USD (maybe Yen and US treasuries too).
BTCUSD, AUDUSD, EURUSD, QQQ DAILY
DXY finally closed above the trendline from the March high. The top side of the line is now proposed support near 93.20. Broad focus is still towards 96-97 although 94.75 is a possible reaction level. Keep it simple…DXY held long term support (see below) and just broke above a 7 month trendline. That’s bullish.
10/25 – DXY focus is higher as long as price is above the 2011-2014 trendline. 96-97 is a general zone to look towards. This zone includes the 200 week average and center line of the channel from the 2011 low.
EURUSD dumped into the month open (1.1720) today before treading water. Whiplash ECB levels for tomorrow are 1.1695 and 1.1770/80. I favor shorting the latter and targeting 1.1480/95. The bottom of this zone is where the drop from 9/1 would consist of 2 equal legs.
AUDUSD 4 HOUR
.7080/90 should be resistance now in AUDUSD after the big drop from .7158,which is the month open and 61.8% retrace of the decline from 10/9. Price could bounce from the center line of the short term channel near .7015 but broader downside focus remains .6700-.6800. Also, 2 legs down from the 9/1 high would be .6836.
10/25 – Current AUDUSD price behavior is similar to that of 2002. In both instances, price traded outside of the long term channel before dropping back into the channel. If this continues, then AUDUSD comes back to .6700-.6800 (200 day average and 25 line within the channel…just like 2002) or so before finding the next low. Seasonal tendencies are bearish through late November.
NZDUSD 4 HOUR
The short term fork in NZDUSD is a beauty. The upper parallel nailed resistance the last 2 days along with the year open at .6724. Resistance should be .6670s now. The last 3 months have taken the form of a complex head and shoulders pattern. The neckline is about .6535, which is just above the median line from the bearish fork. Consider that a possible bounce area.
10/25 – NZDUSD turned down from well-defined resistance in September. Significant highs/lows since November 2017 and the 61.8% retrace of the decline from 2017 cluster at .6760-.6820. Weakness is favored as long as price is below this zone. Near term, a B wave high may be in place at Friday’s high. Weakness below .6650 is needed in order to trigger shorts (see below).
USDCAD 4 HOUR
USDCAD broke above the trendline that originates at the 4/21 high. This line crosses highs in April, May, and September so the break above is important. Support should be 1.3260 now. I’m unsure of upside focus at this point but have been of the mind that price returns to the former 4th wave high 1.3715.
AUDJPY finally cracked today. Former support at 74 should provide resistance now. 72.53 remains a possible bounce spot but I’m targeting the 38.2% retrace of the advance from the March low at 71.35, which is just above the topside of the trendline from the 2018 high.
10/20 – AUDJPY has been churning around the center line of the short term bearish channel for the last 4 days. Markets have a tendency to ‘range’ around the median line before moving sharply in the direction of the trend…in this case down. 75.00ish is well-defined and I’m expecting price to stay beneath that level on its way to the lower parallel, which intersects the 6/12 low at 72.53 early next week.
GBPCAD may be forming a 2 year head and shoulders bottom with a triangle as the right shoulder. Above 74 (triangle line) would be an early indication of something bullish and I’d be willing to take action on strength above 1.7675.