• EUR/USD bounced off of trendline support and the 38.2% retracement, drawn from the Jan. 16th low, around 1.3155/60 earlier today. While it remains above this key level of support, look for the 21-day sma near 1.3250 to remain resistive, however a break below could usher in a test of the top of the daily Ichimoku Cloud around 1.3100 initially. Interestingly, daily RSI has already broken below corresponding trendline support prior to price (as I highlighted last Wednesday) – See FX TECH LAB “Has it put in a medium-term top?”, and as such needs careful monitoring over the next 24-48 hours.
• USD/JPY formed a Tweezer Top candlestick pattern today (typically a bearish reversal pattern) whereby it saw the same high for two consecutive days in a row. One should also note that these highs (81.85/90) have not been confirmed by daily RSI (or other Oscillators for that matter), creating a Bearish Divergence. Interestingly, the pair also remains below the 61.8% retracement (using the April 2011 high & Oct. 2011 low) at 81.65.
• Commodity Currencies (AUD, NZD & CAD) have each seen daily RSI Divergences into their respective high/lows over the past few weeks. Interestingly, Kiwi has experienced the most downside, dropping below its February lows around 0.8245/50, whereas AUD/USD and USD/CAD remain above/below their Feb. lows/highs at 1.0595/00 and 1.0050/55 respectively. With U.S. equities and crude oil remaining firm, look for this Kiwi underperformance to continue – Take a look at AUD/NZD which has surged over the past week and could test the 200-day sma around 1.3020/25 over the coming sessions. However, should we see these other markets finally capitulate, watch for the corresponding moves in Aussie and Loonie to be rather sharp and swift.
• Gold (XAU/USD) remains above the 38.2% retracement (using the Dec. low & Feb. high) and 100-day sma around $1688-93, however the recovery appears to be nothing more than a dead-cat-bounce, with further downside likely over the coming days. Currently, the next levels to focus on should we see a break lower are $1677 (200-day sma) and then $1665 (top of the daily Ichimoku Cloud), meanwhile the daily Tenkan and Kijun lines remain a resistance into $1740.
• Silver (XAG/USD) decisively broke below the 100-day sma and trendline support drawn from the December low around $34.75/80. Should the “poor-man’s gold” continue to remain under pressure, look for the 38.2% retracement near $33.15 (using the 12/29 low & 2/29 high) to be an initial level of support, followed by the Feb. low around $32.65 and then the converging 50 & 200-day sma’s between $32.25-35. Keep in mind that what was support, often becomes a level of resistance – Thus, $34.75/80 will be a key level over the coming sessions.
• EUR/AUD saw a recovery today as noted as a possibly on Friday “Heading into next week, there are a few signs that a bounce could occur, specifically looking at a potential Alternative Elliot Wave count (in red) which would see this latest move lower as overall wave-B, rather than wave-5. Keep in mind, this is simply an alternative count and not the preferred, and as long as we remain below the key pivot around 1.2420 the bias remains lower.” – See FX TECH LAB “The Aussie makes a comeback". Currently, the pair is faced with the 50-day sma around 1.2390/95, which comes just ahead of the aforementioned 1.2420 level.
• USD/CHF saw daily RSI break above its corresponding trendline resistance in advance to price. Currently, the Swissy is pounding on the door of trendline resistance around 0.9135/40, however a further continuation higher is faced with a few key levels of resistance: 100-day sma (0.9185), 55-day sma (0.9260) and daily Ichimoku Cloud between 0.9310-30.
• USD/JPY formed a Tweezer Top candlestick pattern today (typically a bearish reversal pattern) whereby it saw the same high for two consecutive days in a row. One should also note that these highs (81.85/90) have not been confirmed by daily RSI (or other Oscillators for that matter), creating a Bearish Divergence. Interestingly, the pair also remains below the 61.8% retracement (using the April 2011 high & Oct. 2011 low) at 81.65.
• Commodity Currencies (AUD, NZD & CAD) have each seen daily RSI Divergences into their respective high/lows over the past few weeks. Interestingly, Kiwi has experienced the most downside, dropping below its February lows around 0.8245/50, whereas AUD/USD and USD/CAD remain above/below their Feb. lows/highs at 1.0595/00 and 1.0050/55 respectively. With U.S. equities and crude oil remaining firm, look for this Kiwi underperformance to continue – Take a look at AUD/NZD which has surged over the past week and could test the 200-day sma around 1.3020/25 over the coming sessions. However, should we see these other markets finally capitulate, watch for the corresponding moves in Aussie and Loonie to be rather sharp and swift.
• Gold (XAU/USD) remains above the 38.2% retracement (using the Dec. low & Feb. high) and 100-day sma around $1688-93, however the recovery appears to be nothing more than a dead-cat-bounce, with further downside likely over the coming days. Currently, the next levels to focus on should we see a break lower are $1677 (200-day sma) and then $1665 (top of the daily Ichimoku Cloud), meanwhile the daily Tenkan and Kijun lines remain a resistance into $1740.
• Silver (XAG/USD) decisively broke below the 100-day sma and trendline support drawn from the December low around $34.75/80. Should the “poor-man’s gold” continue to remain under pressure, look for the 38.2% retracement near $33.15 (using the 12/29 low & 2/29 high) to be an initial level of support, followed by the Feb. low around $32.65 and then the converging 50 & 200-day sma’s between $32.25-35. Keep in mind that what was support, often becomes a level of resistance – Thus, $34.75/80 will be a key level over the coming sessions.
• EUR/AUD saw a recovery today as noted as a possibly on Friday “Heading into next week, there are a few signs that a bounce could occur, specifically looking at a potential Alternative Elliot Wave count (in red) which would see this latest move lower as overall wave-B, rather than wave-5. Keep in mind, this is simply an alternative count and not the preferred, and as long as we remain below the key pivot around 1.2420 the bias remains lower.” – See FX TECH LAB “The Aussie makes a comeback". Currently, the pair is faced with the 50-day sma around 1.2390/95, which comes just ahead of the aforementioned 1.2420 level.
• USD/CHF saw daily RSI break above its corresponding trendline resistance in advance to price. Currently, the Swissy is pounding on the door of trendline resistance around 0.9135/40, however a further continuation higher is faced with a few key levels of resistance: 100-day sma (0.9185), 55-day sma (0.9260) and daily Ichimoku Cloud between 0.9310-30.