Weekly Summary Major Pairs

Jack Crooks Black Swan Capital

It was a strange dollar reaction yesterday (Friday) on the blow-out jobs report. Slight rally, meander, then acceleration lower. The question: If the US dollar cannot rally on blow-out job news, what will it take? Of course, the yen again was the odd man out, weakening on the day. Hmmm... Is the yen driver risk on risk off, or the Bank of Japan, or a seemingly improving economy? At this point I have not a clue; but we will continue to trade technical opportunities as we see them, with a downside bias still in USD/JPY after more weakness near-term. As you can see in the chart view below, USD/JPY seems out of synch with EUR/USD near-term.

I think it makes sense to work from the premise—the dollar index is in the final stage of the decline which began in January 2017; minute Wave 5 down to complete a major Wave 1 impulse move lower—targeting to mid-81 level. Once this minute Wave 5 down completes, I am looking for a significant rally in the dollar to wrong foot the market, very similar to the 2017 decline which wrongfooted the market (including me).

USD/JPY Daily: The change here is near-term the price action suggests a possible alternative count i.e. further rally back toward 108-50 range before the move lower resumes.

EUR/USD Daily: In minor Wave (ii) decline—complete? The pull-back to 1.2271 in minor Wave (ii) represented a 61.8% retracement of minor Wave (i). And a 1.618 extension carries the pair to our favored target near 1.2750 to complete Wave 5 of Major (1). A break below 1.2153 nullifies this view.

GBP/USD Daily: No change of view here. Working from a completed Wave 4 at 1.3710; setting up for strong Wave 5 rally. Key support is the Wave 4 low at 1.3710; a break below there suggest a more complex correction—double zig zag for example.

USD/CAD Daily: This is a new daily view showing the EW labeling from the swing high up at 1.4589. The primary view is we are now in Wave B corrective, which should push down toward 1.2500 or beyond; before a new rally phase begins taking the pair to 1.3100-3200 level.

AUD/USD Daily: An upgraded daily view here. Looking for a rally in Wave (B) toward 0.8000; then a push down toward 0.7611, with an alternative view to 0.7522, before a major rally ensues.

Author

Jack Crooks

Black Swan Capital

Experience Jack has over 30 years of experience in the currency, equity, and futures arena. He has held key positions in corporate financial analysis, brokerage, investment research, money management, and trading.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.