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USDJPY 4 HOUR: Underperforms
When you see the JPY over or underperform (in this case the latter), it is generally cross flow driven.
In this case, it is either EURJPY or GBPJPY or both that has seen USDJPY test 158.60 for a double top.
The significance of 158.60 is it’s the last resistance ahead of 159.03, which is the top of the current range where the BoJ may be lurking.
XAUUSD 4 HOUR: Liquidity?
Look at the 4 hour (green candle) with a range at 3899 – 3970. It tells you something about liquidity (thin).
So it sets up a glass half full (higher lows below 3900) vs a glass half empty (double top).
Given the broader trend, onus is on the bull side to take out 3970 to break the downside risk.
USDCAD 4 HOUR: Caught my attention
I am not sure which of these has caught my attention more:
1)Higher low
2) Bounce off the “magic 50 level” (1.3950 is also a 61.8% retracement, low was 1.3941)
3) Move back to the pivotal 1.40 level
In any case, 1.4015 is a key level above which would confirm a break of down momentum and allow higher lows to take over if it becomes support.’
If not, upside contained.
AUDUSD 4 HOUR: Retracement
Buy the rumor sell the fact reaction following the RBA rate hike paused almost dead on at 61.8% of .6894 => .7068 (,6951 low vs. ,6960 FIBO).
This, therefrore, becomes more than just a chart point that will keep the focus on .7000 unless broken, which in that case would signal a 4 hour downtrend.
Forex Market Snapshot
The dollar is trading on the firm side with the AUD weakest following the widely expected (6-3 spilt) RBA vote to hike rates.
US yields have ticked up as they follow a bounce in crude oil after yesterday’s sharp drop as the hope trade loses steam.
Worth noting are pivotal levels: EURUSD trading beloiw 1.12 after a visit above yesterday and a brief one again today, USDJPY back to 158.00 and AUDUSD staying below .7000.
US midterms, geopolitics, tech stocks and US jobs at week’s end have split the market’s focus.
US stock market bulls are hoping the answer will be yes,
Will History Repeat and U.S. Stocks Rally After the Midterms?
Apple topped expectations in its fiscal fourth quarter, reporting EPS of $2.10 versus $1.99 expected and revenue of $114.5 billion against a $113.4 billion forecast. Net income reached $30.7 billion, above the $29 billion consensus, while operating income of $35.6 billion also beat the $34.6 billion estimate. Q4 operating expenses totaled $19.2 billion.
NAS100 (NASDAQ) 4 HOUR (CFD): Watch 28000
Tech on the defensive again cutting short the NAS100 rally. This has seen 28000 briefly broken although it is just a pivotal round number with key support at around 27000, a target that bulls do not want to see broken.
Watch the reaction to Apple earnings and the close vs 28000, above which needs to trade to cool off the risk now that stops have been run below it.
XAUUSD VS. BTCUSD (4 HOUR)
XAUUSD: To build momentum off a higher low that would challenge 4039-82, 4000+ would be needed. if not, then look for 3950 to set the tone while trade is within 3900-4000.
BTCUSD: Trying to build momentum off a higher low as well but unless 78000 is established as support, upside will be limited.
Market Update: Indices (Weekly)
Bounces from above US500 7500 and just above NAS100 28000 giving indices a breather where both show 3 red weekly candles as a pattern to watch, especially after the midterms.
This suggests how they close the week will be more important than how it opens to see if this pattern is extended or holds, especially given the history how stocks have performed post-midterms.
In this regard, see our article,
Global view Will History Repeat and U.S. Stocks Rally After the Midterms?
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