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Forex Market Snapshot
The dollar is trading weaker following the Blue tsunami results in the US midterms as risk tone takes a u-turn to the upside. While the dollar is down across-the-board, the JPY is lagging (USDJPY back above 158) as it loses ground again on its crosses. Elsewhere, EURUSD is firmly above 1.12 (1.1250 now pivotal), GBPUSD has sights on 1.35 but so far pausing just below, AUDUSD (an outperfortmer) is back to .7000+ and USDCAD is lower after failing to hold 1.40+
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 after selling following the FOMC saw limited follow through., CHF and JPY lagging as US yields dip along with softer crude oik prices.
- EURUSD:: On the defensive (while below 1.1150) ahead of the ECB decision.
- USDJPY: Bounce off a 157.60 low keeps 158 pivotal amid defense ahead of Friday’s BoJ meeting.
- GBPUSD: Clinging to a bid above 1.33 after a stop run below yesterday failed to follow through.
- USDCAD:: Back to unchanged as focus stays on pivotal 1.40 to set its tone after a bounce from just above its 1.3968 low (near double bottom)
- AUDUSD; Still bid above .7000 but again struggled to hold above .7050
AUDUSD DAILY: Weekly whipsaw
AUDUSD trying for a breakout to the upside following last week’s outside week to the downside.
While .7000 is likely most important in keeping a strong bid, .7013+ is needed to maintain a breakout.
Looking for a driver, look at AUD crosses, not just EURAUD but AUDJPY as well.
Forex Snapshot: Weaker EUR
EURUSD: 1.1182 (opening week gap lower)_ => 1.1235 (filled gap) => back to pivoting 1.12
EUR crosses: Weak crosses across the board, led bu EURAUD and EURCAD while EURGBP extending downtrend. Creating tug-of-war with USD (e.g. AUDUSD up, USDCAD down, EURUSD down on the day.
AUDUSD appears to be losing steam after reaching a 4-month high of 0.7223 on Monday, sparking speculation that the bulls may take a backseat in the short term. However. the bullish crossover between the 20- and the 50-period SMAs sustains optimism that any pullbacks could represent healthy consolidations rather than a disruption in the multi-week uptrend.
Market Update: USDCAD vs AUDUSD
What it would take to test/break parity (1.000), which is clearly an obstacle?
Simple algebra:
AUDCAD = USDCAD x AUDUSD
1. USDCAD break, then accelerates above 1.3910 while AUDUSD lags, stays below .7200 (e.g. 1.3950 x .71685)
2. AUDUSD break, accelerates above .7200 while USDCAD lags (e.g. 1.0000 = .7225 x 1.3841)
3. A little of both (e.g. 1.0000 = ..72 x 1.3889
Daily charts: (Right click on any image (or chart) to open a full screen in a new tab)
AUDUSD DAILY: 9-day pattern broken
Break of a 9-day pivot around .7000 yesterday (well documented here befrrehand) sent a bearish signal. The break of .6962, the bottom of the 9-day range exposes .6906 as the next target.
On the upside, back above .6962 would cool the risk but only .7000+ woul;d negate it.
EURUSD DAILY: 7 day pattern
Extended its trade around 1.14, which has now traded in each of the past 7 days.
Range over this period has been 1.1353-1.1435, low was set yesterday before a bounce to 1.14.
As can be seen by moves in USDCAD after breaking a 12-day pivot around 1.42 and yesterday’s break of a 9-day pattern around AUDUSD .7000, it pays to keep an eye on EURUSD’s pivot around 1,14, The only difference is that 1.42 and .70 are more important pivotal levels than 1.14.
Onus would seem to be on the bull side to break the pattern as chart shows consolidation but with a greater risk on the downside. Let’s see if the reaction to the FOMC resolves the battle.
Forex Market Snapshot
A bit of a disconnect with crude oil up, US bond yields up slightly and the USD trading mixed as markets show a reluctance to chase war headlines too far.
AUD, the underperformer, has seen AUDUSD extend its slide after breaking a 9-day pivot around .7000 (bearish signal) yesterday.
The JPY is outperforming, suggesting AUDJPY selling has been a dominant flow as expectations of an RBA rate hike were scaled back after the CPI report.
A key focus today will be on the FOMC decision and Chair Warsh’s press conference.
AUDUSD DAILY: Adios .7000?
On the verge of breaking a 9 day pivot pattern around .7000, which sends a bearish signal but only confirmed by a firm break of .6962, the bottom of the 9-day range.
Catalyst: MARKET ANALYSIS: AUD weaker after RBA’s Bullock fails to convince market of immediate tightening Newsquawk.com
Forex Market Snapshot
A bit oif a disconnect with softer oil prices (and dip in US yields) while the dollar maintains a generally firm tone but so far with limited follow through.
EUREUSD: Back to about unchanged after holding a test of 1.1361 suppoprt
USDJPY: Filled its opening week gap to 163.85
GBPUSD: Focus still on 1.3300 (bearish below) after breaking down through it yesterday (low 1.3284)
AUDUSD: The underperformer and so far breaking a 9-day pivot around .7000 (bearish) but only confirmed by a break of .6962 (tested, holding so far).
Forex Market Snapshot: USD down but not out
The dollar is trading lower (except vs the CAD) as opening week gaps remain unfilled. Moves have so far seen limited follow through in a reaction to what is still just a fragile pause in US-Iran hostilities.
This leaves markets in a headline watching mode with one eye on crude oil where Brent has fallen sharply from last week’s brief trade above $100 (last $89,13m -7.9%).
For USD traders, EURUSD 1.14 is pivotal after the move up paused below 1.1435.
AUDUSD is currently trading at .7000, a level that has traded in each of the past 9 days.
AUDUSD DAILY: 9 DAYS IN A ROW
Opening gap has seen .7000 trade for the 9th day in a row.
Range ovcer this period .6962-.7027
The longer this pattern goes on, the greater the risk of a directional move once it is broken. Otherwise, expect limited follow through until .7000 becomes clear support or resistance.
AUDUSD DAILY: Will the pattern around .70 be extended? Pattern: .7000 has traded in each of the past 7 days Range over this period: .6962-.7027 (low was set yeswterday) To extend the pattern to 8 days, .7000 would need to print today. If not, it would be a potential bearish sign BUT only confirmed if the .6962 low is taken out.
