• EUR/USD summer lows resist but indecision at 30 year trendline (arithmetic)
  • USD/JPY median line does it again
  • AUD/USD – embrace the slop

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EUR/USD

Weekly

EUR/USD Indecision (Weekly Doji) at 30 Year Trendline

Chart Prepared by Jamie Saettele, CMT

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-EURUSD broke the summer lows (1.0807/47) last week so downside potential may be realized towards parity (parallel with line from 1995-2008 highs). In fact, those summer lows provided resistance this week. Former support providing resistance is bearish but be aware of the 30 year trendline that EURUSD is sitting on. In other words, be quick to abandon a bearish bias and even turn bullish on a move through resistance (summer lows) lest you be run over by a rally similar in scope to the ones that have materialized from this line in the past. I’ve been tracking SSI down here too. Typically, SSI will register a reading near 2 (or -2 for a bull move) early in a trending move. Despite one of the strongest 20 day declines in recent years (20 day RoC was lower at the Jan and March lows), SSI hasn’t even spent much time above 1.5. The implication is that retail is hesitant to buy weakness. This isn’t necessarily bullish, but it’s not bearish either. It makes sense that these comments convey indecision; this week formed a doji after all!

GBP/USD

Weekly

EUR/USD Indecision (Weekly Doji) at 30 Year Trendline

Chart Prepared by Jamie Saettele, CMT

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-No change to last week’s GBPUSD comments other than emphasizing the importance of where price is right now (see the Daily Techs). “In line with the broader trend, 9 months of sideways trade in GBP/USD has resolved to the downside. Focus is on the lower parallel supports that cross lows over the last several years. In other words, focus is on a new low (below the April low). A break of the downward sloping lower parallels could set off a crash towards the 2009 low.”

AUD/USD

Weekly

EUR/USD Indecision (Weekly Doji) at 30 Year Trendline

Chart Prepared by Jamie Saettele, CMT

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-AUD/USD is in a tricky spot. The dominant downtrend is very much intact of course but there have been prolonged periods of trading around this median line that gave way to decent counter trend moves (rallies). In other words, everything since the September low may very well be corrective but AUD/USD could trade in a more or less nonsensical range for a while longer before the downtrend attempts to reassert. Levels of interest in the event of a new low are .6741 (1999 high) and .6433 (range expansion objective).

NZD/USD

Weekly

EUR/USD Indecision (Weekly Doji) at 30 Year Trendline

Chart Prepared by Jamie Saettele, CMT

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-NZD/USD is wedged between a long term resistance line (was support in January) and an even longer term support line. If this long term support gives way, then focus would shift to .5673 (combination of the next parallel and the 1999 high). Conditions are similar to that of AUD/USD (range).

USD/JPY

Weekly

EUR/USD Indecision (Weekly Doji) at 30 Year Trendline

Chart Prepared by Jamie Saettele, CMT

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-NFP day (11/6) produced a break above an important horizontal level in 121.60. FXTW wrote last Friday that “immediate focus is on the long term upward sloping median line. This line has been support and resistance in the past. The late 2014 (BoJ on Halloween) advance commenced upon a break above this line as well. Point is, the line is a useful reference point…so pay attention!” That line was reached on Monday and USD/JPY drifted lower the rest of the week. The short term breakout level (120.60) is important to the integrity of any bullish case. Weakness below there would once again bring a yearlong topping process into focus.

USD/CAD

Weekly

EUR/USD Indecision (Weekly Doji) at 30 Year Trendline

Chart Prepared by Jamie Saettele, CMT

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-FXTW wrote previously that “USD/CAD has plummeted from several pips shy of the long term Fibonacci retracement at 1.3462 (61.8% retracement of 2002-2007 decline). The current juncture, defined by the March high at 1.2834 and a slope level near 1.2720, could influence for a bounce but the larger trend has changed (it’s down).” Recent action diminishes confidence in (but doesn’t destroy) the topping ‘idea’. New highs could carry to the next parallel near 1.38 (all-time high is 1.618…). Below 1.3175 would delay anything bullish until support near 1.2900 (slope line that crosses the February high, March high, and October low).

USD/CHF

Weekly

EUR/USD Indecision (Weekly Doji) at 30 Year Trendline

Chart Prepared by Jamie Saettele, CMT

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-There is no change to recentUSD/CHF comments other than noting that .9900/40 is support in the event of a pullback. “USD/CHF has broken out from a 7+ month triangle. The rate has stalled at the year open price. The triangle breakout objective is 1.1182.”

Bonus Chart

BTC/USD (Bitcoin)

Weekly

EUR/USD Indecision (Weekly Doji) at 30 Year Trendline

Chart Prepared by Jamie Saettele, CMT

-2 weeks ago, FXTW published a BTC/USD chart and noted that “BTC/USD has broken out from a 10 month sideways base. This is bullish until noted otherwise.” The range expansion objective from that base was 483.58 (317.99-152.40 + 317.99). The target was hit in just 5 days (high was 502). As is typical in such a speculative arena, intense media coverage marked the top of that move as well. So, how important was the top at 502? Or rather, how important was the breakout 2 weeks ago? There are parallels with the July 2012 breakout that may help in understanding the current environment.

-In July 2012, BTC/USD broke above the January high after 26 weeks of consolidation. The rally carried into the November 2011 high and reversed sharply following a weekly RSI print above 70 and tested the breakout level the same week. From the point of reversal, BTC/USD consolidated for 22 more weeks before resuming higher in January 2013.

-In October 2015, BTC/USD broke above the March high after 33 weeks of consolidation. The rally carried into the November 2014 high and reversed sharply following a weekly RSI print above 70 and tested the breakout level the same week. From the point of reversal, BTC/USD consolidated for ? more weeks before resuming higher in ? 2016.

-This should be fun to follow as we head into 2016 and beyond.