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Technical Weekly: US Dollar Whiplash Ends with a Trump Bump

Technical Weekly: US Dollar Whiplash Ends with a Trump Bump

2016-11-11 23:00:00
Jamie Saettele, CMT, Sr. Technical Strategist
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--Quarterly charts and comments

EUR/USD

Weekly

Technical Weekly: US Dollar Whiplash Ends with a Trump Bump

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

High Frequency Trading Tools

-Recent weekly analysis noted that “the near term EUR/USD breakdown could certainly ‘launch’ a more important move but there are several levels to pay attention to in the event that this move is a trap. The notable level to watch is the 30 year trendline near 1.0880. The other spot to watch is 1.0820; the May and July 2015 lows…there is a history of near term capitulation and even bigger reversals towards the end of October. Examples include 2013, 2011, 2009, 2008, 2004 and the all-time low in 2000…watch 1.1040 for resistance. A settle above would indicate a change in behavior, especially since the 30 year trendline held again.” EUR/USD took out 1.1040, ripped for 2 weeks and spiked on the election into the long term bearish median line before settling back at the 30 year trendline this week again. Whiplash comes to mind. The week’s high was a 9 week high and 39 week (3 quarter) low. It’s difficult not to think that this is bearish so perhaps the 30 year trendline finally gives? Maybe this is capitulation on my part and not wanting to miss the next move but it’s difficult not to be bearish after a market wipes out a large swath of price action and closes on the lows.

As always, define your risk points (read more about traits of successful traders here).

-For forecasts and 2016 opportunities, check out the DailyFX Trading Guides.

GBP/USD

Weekly

Technical Weekly: US Dollar Whiplash Ends with a Trump Bump

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

-Recent comments for GBP/USD remain valid and I’ll add that the 13 week average is just above and will represent a big test for the rally. :A re-test of the trendline that extends off of the 1993 and 2001 lows would result in a move back near 1.2800-1.2900…on a longer term basis, there may be no real support until early 2017 based on the 96 month (8 year) cycle low count. That cycle count is shown on this chart. A price level of interest is where the decline from the 2014 high (1.7191) would be equal to the 2007-2009 decline in percentage terms (36% declines). The math produces 1.0970.”

AUD/USD

Weekly

Technical Weekly: US Dollar Whiplash Ends with a Trump Bump

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

-AUD/USD traded to its highest since the week of the April high and closed at its lowest week since mid-October. The bearish outside week is…bearish, until further notice. As noted a number of times in recent weeks, a weekly close above .7719 is needed in order to signal a major upside breakout. This week’s action suggests that Aussie is headed lower again.

NZD/USD

Weekly

Technical Weekly: US Dollar Whiplash Ends with a Trump Bump

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

-NZD/USD reversed from the ‘magnetic’ 1985-1993 trendline again this week. I wrote last week that “ideally, the next few weeks clarify whether or not trade since July is a topping pattern (possible head and shoulders) or simply consolidation within a bullish channel towards higher levels. The bearish outside week suggests that the topping pattern will win out. Even so, be aware of .6882-.6906 (October and December 2015 highs) as a level of importance in the event of a drop under trendline support.

USD/JPY

Weekly

Technical Weekly: US Dollar Whiplash Ends with a Trump Bump

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

-I wrote last week that “USD/JPY trade since Brexit is a triangle. This interpretation gains traction with each passing week. This week’s drop followed through on the 10/28 reversal from the well-defined 105.50 (May low…near the October 2014 low and January 2014 high). The implication is that price trades lower to sideways for the next few weeks before thrusting to the downside.” The close above 105.50 is an important change in behavior and shifts focus to the line off of the December and January highs just above 108.00 and then the 55 week average (not shown) just above 110.

USD/CAD

Weekly

Technical Weekly: US Dollar Whiplash Ends with a Trump Bump

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

-“USD/CAD is back at the parallel again so pay attention! Failure here could be a big deal and lead to the previously suggested wedge breakdown. A push higher would expose a cluster of technical levels in the 1.3800s. Extremely narrow ranges sometimes indicate the proverbial ‘calm before the storm’.” The resolution was higher so focus is towards the noted 1.3800 handle. Notice that last week’s low was right at the 55 week average, which has been resistance earlier this year.

USD/CHF

Weekly

Technical Weekly: US Dollar Whiplash Ends with a Trump Bump

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

-The post-election plunge tested and held the 5+ year support line…again! The rate ends the week near range highs and at the trendline that extends off of the November 2015 and January highs. Trade since April is a rectangleand a close above .9944 would signal a breakout. Don’t forget about the long term time symmetry described here.

Bonus Chart

Iron Ore Futures

Weekly

Technical Weekly: US Dollar Whiplash Ends with a Trump Bump

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

-Last week, I wrote about the important behavior change in copper (also a video here). Iron ore has also broken out, completing an 18 month head and shoulders pattern this week. The market is already into channel resistance so watch the breakout level (64.22) for a re-test. The measured objective from the bottoming pattern is 90.41, which intersects the long term resistance line in March 2017. Yes, it’s somewhat confounding to see the action in copper and iron ore alongside AUDUSD but that’s why it’s best to study each market on its own technical merit and let price do the speaking.

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