GBPUSD - Trend lower?

I can write about the decline, rally and subsequent further decline during the month of Nov in this pair but what really matter is the response following Super Mario Thursday – last Thursday! We did NOT have a Key Reversal Up such as happened in EURUSD but the intention was there. This was coincident with all MAs beginning to point lower, a sign that has prompted me to push the bullet point above into mildly bearish territory but contra to the action indicated by last Thursday’s action. Yet I must point out that Non-Farm Payroll Friday that followed the Thursday was disappointing to any bull. There was no follow through higher from Thursday’s event; prices did not attempt to test up to the key 50% Fib at 1.5201, prices actually ended the week with a lower close Friday compared to Thursday. Looking at the Weekly Chart we’ve not done anything to threaten the KR Down from the week ending the 6th of Nov. Additionally, the Monthly Chart looks a bit indecisive but not much more. Hence there is pressure now that though the recent rally may have relieved the oversold situation, there still has to be a follow through in the next few days higher otherwise we will more than likely head back down. So what levels are we looking at? Well, the current key resistances on the upside are Thursday’s high (1.5158) and the previously mentioned 1.5201. There needs to be consecutive closes over these soon so that an attempt can be made at the resistance band 1.5244 – 1.5322 in which the key longer term 50% Fib at 1.5244 and 1.5288 plus the Long MA currently At 1.5322 make up a sizable obstacle. After that further resistance is at 1.5405 – 1.5410, again substantial. Below the market we have support from the very recent 50% Fib at 1.5025, the low at 1.4893 and then pretty much nothing until 1.4687. 

GBPUSD

EURGBP - Trend?

I moved the bullet point on this pair last month into mildly bearish and was rewarded with lower markets until just after mid Nov when an extraordinary thing happened. Prices halted on the support 0.6982. This was the low of a very long legged Key Reversal up on the 29th of Jun and I thought it significant enough at the time that with other lows at the same level subsequent to the original action, I would maintain a support line there…and that is how I recognised why the action was holding there and then moving higher, including overcoming an ‘almost’ Key Reversal Down on the 25th of Nov. However, Super Mario Thursday is where the most interesting action happened this month – and it actually didn’t start there! No – two days prior on Tuesday the 1st of Dec we had a KR Up which is where the move started. Now the move up has some very deep concerns for me. First off, the good things! The rally did breach Jul – Oct 50% Fib at 0.7211, the recent 50% Fib at 0.7236 as well as the Medium & Long MAs (currently both 0.7198). Now the negative things – the rally on Thursday was not exploited on Non-Farm Payroll Friday! Prices closed lower, below the two 50% Fibs mentioned above on the second day and barely – within 3 tics – of closing below the Long MA/Medium MA combo. This action is not good for a continuation of the bull move and we would need to have consecutive closes very, very soon over 0.7211 to keep the momentum. If we fail then there is likely a test of the 50% Fib formed by the recent action at 0.7115. Consecutive closes below that and we are possibly testing 0.6979 again. Now – there is also a very interesting pattern forming of the MAs – a Bow Tie Formation. Just to remind you, when three or more MAs come together and crossover more or less simultaneously and then splay away – that is a Bow Tie Formation. Theoretically, some 15 – 20 business days after the crossover the market moves in the direction of the splayed out MAs. So far we haven’t formed this but we could within the next few days so watch out. With this all in mind, I have turned the bullet point above into neutral.

EURGBP

EURUSD - Trend down?

Last month at time of writing EURUSD was at 1.1005. As I write this now it closed Friday at 1.0884 so I guess the bullet point above was right but as you can see from the Daily Chart above that is not the full story. The full story has been Super Mario Thursday and to a lesser extent the follow on that happened on Non-Farm Payroll Friday. SM Thursday itself produced a superb Key Reversal Up Pattern following a Bullish Outside Day on the previous Wednesday so we could argue that the move up actually started on the Wednesday. However, there are some issues – the rally on SM Thursday did not manage to break significant resistance levels made up of 1.1017 (recent key 50% Fib), 1.1033 (Long MA), 1.1063 (Medium MA) and 1.1125 (next significant Key 50% Fib). It didn’t even come close! Then on NFP Friday we saw the market rejecting any try higher and closing lower. If we do not have a significant try at the previously mentioned resistance levels – and soon - then we may see prices head back down and test the key support for this move up, the key 50% Fib at 1.0760. The one advantage this support area has is its proximity to the Sep 2003 low at 1.0757 which ‘might’ add further ammunition to the bull case. So, these are the key levels, a band between and 1.1017 – 1.1125 on the upside and 1.0760 – 1.0753 below. With now three out of four MAs still heading down rather than the full complement therefore I feel obliged to add a question mark to the bearish bullet point above.

EURUSD

AUDUSD - Trend?

I love it when a plan comes together – last time I wrote ‘…we had a very bullish move last Friday, the close was right on the Key 50% Fib of the Sep – Oct move at 0.7137, so it was bullish but there was also room for doubt.’. The next three days after, we saw a rally but then it petered out (…room for doubt…) and prices fell down to make the Nov lows whilst also confirming the third point in a three point Uptrend from Sep (currently 0.7060). This then projected prices higher and at time of writing we have two bullish Golden Crosses on the MAs and a very rare bullish Double Consecutive Key Reversal Up on the Daily Chart. That ought to be good enough but one the KRs Up is also an Indecisive Long Legged Doji Cross, admittedly a bit bullish but on the face of it Indecisive. Additionally, prices have run into the key resistance band 0.7370 – 0.7383 consisting of a 50% Fib, the Oct high & another Fib…and that is where we are. So what next? Well, we have further resistance above at 0.7526 (50% Fib) plus dynamic resistance in the form of a descending Long MA (currently 0.7456). Support on the other hand is well below at the 50% Fib at 0.7137 plus the Uptrend previously mentioned. It would seem likely that we may have another try on the upside but given the nature on previous attempts at the 0.7370 – 0.7383 area it would seem this time likely to fail and we move lower. I said ‘…this time…’ because we have had a number of bottoming formations on the Daily Chart above plus the renewed Uptrend may be starting to form an upward Triangle formation of some form. Hence, any declines, as long as they keep above the Uptrend on consecutive closes, could be seen as accumulation of ammunition for a try higher. With MAs mixed, I’ll move the bullet point into neutral as both higher and lower have reasonable arguments and I would rather find further evidence for any try in a specific direction.

AUDUSD

USDJPY - Trend?

I am glad I kept the bullet point above in neutral rather than being prompted by a Double Top that turned out to be more of a Bullish Halfway Hesitation. Over Oct – Nov and we have seen prices rise and reach the target for this move at 123.65 – coincident with the Jun 20017 high. Since then sideways… we may have formed a Triple Top in which case we it would be back down to the multiple 50% Fibs at 120.86 & 120.88. Alternatively, if we take the cue from the recent action and look at the whole of Nov as a form of Halfway Hesitation then the upside target might be just over 127.00—but only if it takes out the Jun-todate Downtrend (currently 124.35). With three out of four MAs basically flatlining and only one really drifting higher (Short/Medium MA) the bullet point, I suggest, ought to remain as neutral. However, please watch the MAs. We may have a Bow Tie Formation happening later this month as all three MAs – Short/Medium, Medium & Long MAs look to simultaneously crossover and splay away – like a Bow Tie. The action typically kicks in 15 – 20 days after crossover in the direction of the MAs move.  

USDJPY

USDBRL - Trend?

Last month I wrote ‘However, new consecutive closes below 3.7227 would be a concern but the market would only start to look neutral on consecutive closes below the Med MA.’ which was fine at the time but as we are now actually testing the Medium MA (currently 3.7292) on the downside I feel it appropriate to point out that we have two MAs pointing up and two pointing down – therefore I am moving the bullet point into neutral from the start. Looking back, Nov has for the most part traded lower than Oct’s close which was based on the 2003 high at 3.6900. Lows have been lower and highs, with the exception of last week, have been lower as well. The rapid ascent of the Medium MA has brought an apparently strong level of support (look back to June just to see what I mean) that is about to be tested this coming week. So what next? Well, I have doubts either way – higher or lower. The Medium MA and the 2003 look to be suitable targets for testing but I’m mindful of only three weeks ago the market failing with no follow through on a Key Reversal Down on the Weekly Chart. Additionally, though it has been broken, the Jan – Apr Schiff Pitchfork & especially the Lower Tine (currently 3.6571) looks ominous as support. Yet on the upside it does not look to be easy either – we are below a recent important band of resistance between 3.8138 – 3.8218, the first attempt back up towards there failed at the Middle Tine of the Jan – Apr SP (currently 3.98431) before it even tried the key recent 50% Fib resistance at 3.9708. Overall neither looks great and until I see further this only adds to my decision to go neutral on the bullet point above.

BTCUSD (Bitcoin) - Trend up?

I was very cautious last time, there had just been a Key Reversal Down on the Daily Chart & though hopeful of higher prices I was somewhat suspicious. Then the Russian Ponzi situation in China happened and all hell broke loose on the upside. Prices only halted, exhausted, at minor highs from Sep 2014 (492.39 & 497.03). They also very crucially formed after this quick & big move higher an Indecisive Spinning Top Pattern which was the clearest signal out there that prices were not comfortable to sustain the rally and in the days following we saw a fall back below the new 50% Fib at 350.08 and below the Oct close but then halted just under 300 & started a reverse back up, though milder in nature. At this time that I gave a TV interview and suggested that after reaching and failing at the resistance level at 350.08 that if prices stayed above the 317.92 – 314.25 area on a two consecutive close basis, we would likely move back up as we had formed a new Uptrend (currently 340.81) from Oct and using the newly formed Nov low. I reasoned that if prices were to fall then the Aug-to-date Uptrend would be tested and as this had not happened, prices ought to try back up…which is what they did. We went up and over, closing many times over 350.08. Next ahead was the band made of an earlier high at 386.81 & the 61.8% Fib of the Aug – Nov move at 385.91. This has/is being tested as nearby is also the next key level of resistance – the 50% Fib of the Nov action at 397.99. In the last few days both have been tested – we do indeed have two consecutive closes over the 385.91 – 386.81 area but only just plus the first attempt at 397.99 has led to a Bearish Doji with the possibility of lower prices next week. However, any move lower could be seen as an attempt to try to gather fresh ammunition for another attempt higher as any two consecutive closes over a break of 397.99 would need more than what is currently available. So – overall, still looks bullish with a question mark and that question mark is due to the proximity of the 50% Fib at 397.99. Two consecutive closes over that and 422.51 beckons. Alternatively, if we head south then I would suggest it would be neutral unless we have consecutive closes underneath the combination of the 50% Fib at 350.08 and the Oct-to-date Uptrend (currently 340.81).

BTCUSD

USDZAR - Trend Up

My fears last time that there was something going on with the move up were assuaged a little as though we formed new highs in Nov…twice…we also had a sharp pullback as the move higher was not uneventful. Since reaching the high early last week we have pulled back but not enough to the key 50% Fib support at 14.1884 of this current move up. There has been some indecision last week with Friday finishing as an Indecisive (slightly bearish) Spinning Top Pattern plus the whole week looking like a Tweezer Top on the Weekly Chart. However these are the only two negatives as not only do we have the lack of a pullback to 14.1884 but also we have support below at 14.1574 (Sep high) & 14.0192 (early Sep high) and finally though still young, the Oct – Nov Schiff Pitchfork looks OK with some dynamic support on the Lower Tine (currently 14.2836). I stress that this is still a young SP and liable to break but it is also the same as the Oct-to-date Uptrend plus I also note how the Middle Tine acted as resistance early last week. So where now? Apart from the 14.4917 high there is a projected 50% Fib at 14.7324 which might be suitable on the upside but I also note the really interesting proposed resistance and possible target could be the coincidence of Fibs at 14.9853 – 14.9948, this is one to watch. As all MAs are currently pointing higher I will move the bullet point into full bullish.

USDZAR

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