GBP/USD TREND LOWER?
A very interesting start! After a rapid fall in the first few weeks of the year, we’ve had on the 21st and also the 26th, two Key Reversals Up. This I would ‘normally’ have said is the first sign that things were about to change and was further enhanced as on the 29th we had a KR Down which failed immediately the day after AND prior to all this we had a KR Down on the 19th which though followed on, led only to the 1st KR Up. I highlighted ‘normally’ because as far back as a TV interview on TipTV on the 7th of January (if not earlier) I had pointed out the unusual multiple crossovers of the Andrews & Schiff Pitchforks on or around the 25th – the area highlighted by my Dialogue Box with ‘???’ inside.
At the time I drew that on the Daily Chart I did not have an idea whether it would be bullish or bearish…just that it would be significant. Now we can see that the 25th sat square between the two KRs Up AND the two KRs Down…hence its significance. All fair and good but why do I still have a mildly bearish bullet point above? Again it’s simple – the rally was great but so far we’ve not managed to break the recent 50% Fib resistance at 1.4659. This is the first real resistance apart from past lows/highs and it needs a minimum of two consecutive closes over it to suggest at the least a neutral market. The moved up in Jan has indeed tempered the flow lower but has not extinguished it yet.
Support is at 1.4444, 1.4366, 1.4344 and in a band 1.4256(dynamic) to 1.4181(dynamic) then 1.4150 and 1.4108 – 1.4080.
Resistance is at 1.4502, 1.4522, 1.4562, 1.4609(dynamic), 1.4643 – 1.4659, 1.4687 and 1.4786 – 1.4795.
EUR/GBP TREND UP
Over the last two months I had written various pieces on how the market had been fairly bearish and that it seemed to be settling into a somewhat neutral state with possible bearish tendencies. However, last month when I was writing the longer term view I noted that ‘…we have two possible outcomes for the next 12 months. 1) A Bearish Halfway Hesitation with a potential target marked by X1(0.8225) and coincident with lows back in 2001 – 2002 or 2) A basing action (possibly a Double Bottom but it is too early to say) with a potential target marked by X2(1.3053) on the Monthly Chart above. Due to all MAs heading down, I feel obliged to make the bullet point bearish but given recent action and a lack of seeming enthusiasm for trying lower I also feel obliged to place a question mark against it.’.
This nascent bullishness in the face of a seemingly bear market was in part prompted by the huge Key Reversal Up on the 3rd of Dec 2015. However, the following action left a lot to be desired and I was minded to think this was possibly going to fail. Even the Bullish Piercing Pattern I saw on the 1st of Feb, I thought was of limited impact at first. However, this proved to be the spark for the recent rally and strong clearance higher of the key 50% Fib at 1.1017 and the longer term one at 1.1125 formed just recently leads to hope the rally may have more than originally anticipated.
Support is key at 1.1130 – 1.1130, 1.1052(dynamic), 1.1017 and then to a lesser extent at 1.0986, 1.0974, 1.0955, 1.0904 and again key at currently 1.0891(dynamic).
Resistance is at 1.1244, 1.1263, 1.1304, 1.1386 and then at 1.1495. One final note, if the action in recent days is actually a Bull Flag/Halfway Hesitation, then the target would be in the region of 1.1325. With two MAs pointing up and two about two, I’ve moved the bullet point into mildly bullish.
EUR/USD TREND UP?
When I looked again at this Daily Chart…I could sum up my feelings that if this market was an animal it would be a neurotic Siamese Cat or something similar. During Jan we crash down through recent lows and with a Key Reversal Down on the 15th look set for a move lower still further. However, the next day, though we have a 2nd close at a new low, it is also an Indecisive Doji Cross that prompts further bullish action leading to the close over the combined Short/Medium MA (currently 0.7142) and the Medium MA (currently 0.7144). Yet even this fails and two days later we crash back down below the key 50% Fib at 0.7103 though not below the recently formed Uptrend currently at 0.7039. Hence the reference to a neurotic cat…probably with a bullish and bearish cucumber by its side(s)! Looking forward, the very recent move lower would be stiffened by two consecutive closes below the Uptrend though there is still plenty of support at 0.7037(coincidental), 0.6988, 0.6951, 0.6916 and 0.6823. Topside has resistance at the key 50% Fib at 0.7103, key MAs at 0.7144 and then 0.7169, 0.7215, 0.7243. After that, in a band 0.7315 – 0.7336 with the dynamic Long MA(currently 0.7315) as key on a closing basis. MAs looked mixed with two basically sideways and one down and one up though on the Weekly Chart we have a Bullish Pipe Bottom but I would be cautious on that. All in all, I’ll maintain the neutral bullet point above…at least until we get sufficiently away from 0.7103.
AUD/USD TREND?
Back in early Nov, I warned of a possible Bow Tie formation of the MAs later on in the month. This came about and the move after 15 – 20 days was obviously bearish. It was ironic that a few days after the Bow Tie crossover, we had a Key Reversal Down which led the way…bearing in mind my distrust of KRs in anything to do with JPY. Prices motored on down but started to stutter once we reached the support band 116.50 – 115.52 with the best support remaining untested between 115.84 – 115.52…we failed to close below 116.50 and all but one attempt (so far) has not even really breached 116.50. The subsequent rally back up was good with consecutive closes over the key 50% Fibs at 119.82, 120.62 & 120.73 plus the Medium MA (currently 120.52).
However, this did not really help as the market chose to give up the bull run at the Long MA (currently 121.46) which was a bit surprising as it didn’t seem that strong on the previous attempts higher and lower. Nevertheless, it also gave us a Bearish Engulfing Pattern on the Weekly Chart which is indicative of lower markets. So where are we now? Well, all MAs point lower, we’ve had a recovery rally stall well ahead of the previous highs and look to possibly test lower…or do we? Friday’s action is disturbing for a bear…an Indecisive Spinning Top on NFP Day and again…a failure to break convincingly below 116.50… Action in the coming days will be very interesting as prices really need to have multiple closes below the 116.50 – 115.52 band to continue lower. Otherwise we may try higher again. However, may I propose another scenario…a longer term bearish one? Should prices fail to push through the lower levels and recover then the gauge of the recovery will be if prices close consecutively over the Long MA.
If they approach and fail any try higher and then head south again then especially if they hold to the Upper Tine of the Dec 2015 – Jan 2016 Andrews Pitchfork (currently 120.58 and descending) then we could have a possible longer term bearish play – a bearish Descending Triangle. More on this if it starts to happen as it may take months. An alternative (which seems unlikely at the moment) is a straightforward Double Bottom…but more on this if it comes about. Current support is already mentioned but resistance is at 117.09 (dynamic), 117.95, 118.15, key at 118.82 then 118.91 and key again at 119.52 – 119.60 then 119.82 and key in a band 120.52 – 120.73. I haven’t marked it but look out during the period 16th – 19th Feb. The Upper Tine of the AP crosses over the major support. All in all, bullet point is full bearish but I have been tempted to put a question mark on it.
USD/JPY TREND DOWN?
Each year I wonder if this exercise now would be just academic as Carnival (L:CCL). has already kicked off in Brazil. Nevertheless, for later in the month when we start back up again, here are my ideas. Still supported within (just) the Jan 2015 – Apr 2015 Schiff Pitchfork with the Lower Tine support (dynamic) at 3.8775.
Further support at 3.8502, 3.8218 – 3.8138, 3.7262, 3.6907 – 3.6900.
Resistance at 3.9039 – 3.9054(dynamic), 3.9697 – 3.9794, 4.0153, 4.0356, 4.1236 and 4.1635(dynamic).
Consecutive closes below the Lower Tine of the SP is not necessarily a bearish sign as we had those on the upside back in Sep 2015 on the upside and prices reined back into the SP. However, consecutive closes below 3.6900 would be very significant. MAs are all pointing up bar the Short MA though the Medium MA is looking weak…therefore a bullish bullet point but with a question mark.
USD/BRL TREND UP?
An interesting past month and start to the year. First off we tried up to the Dec 2015 highs around the 468.17 level and found the resistance there is quite significant there…so we headed back down – fair enough. The drop on the 15th was the ‘margin call drop’ whereby margin calls in other markets, notably in stocks due the start of 2016 fall, caused BTC long liquidation to cover the calls. Prices found support on the key Aug 2015 – Nov 2015 50% Fib at 350.08 and rebounded, looking to form a possible Bull Flag. However this immediately failed after it reached its target and we’ve stepped back down a few levels since then. Interestingly, the market has held up on the Uptrend formed since Nov 2015 (currently 370.16) though I am swaying towards it being tested again – the reason, each recent high has been lower and we are trying to test down though without much success at the moment. With the accumulation of support and resistance and with MAs starting to look confusing I am still tempted to keep the bullet point as mildly bullish…though definitely with a question mark over it.
Support 373.46, 371.03(dynamic and key), 363.73, 360.69, key at 350.08 and 342.81(dynamic) then 326.88(dynamic), 317.92 - 314.25, 310 and 294.06.
Resistance is key at 381.21 and 385.91 – 386.01, 397.99 then 401.73, 405.97 and 422.51.
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