US$ weakness bring some key FX levels into focus by Mary McNamara

The US$ added to losses early in the US session following weaker than expected US GDP. The subsequent release of the Fed FOMC April statement, whilst a bit more dovish, did not exclude a June rate hike and this enabled the US$ to put in a small recovery effort. The US$ has broken through key 95.50 support though and a daily close below this level would suggest bearish continuation. US stocks followed a similar path with early falls and then a recovery but still closed the day for a loss. However, the 3 main US stock indices have all closed above key support levels. This continued US$ weakness though is bringing some big levels on FX pairs into greater focus.

USDX daily: a daily close below 95.50 would be a bearish signal. This candle has a few hours until it closes though:

USDXdaily

USDX 4hr: the US$ fell following GDP data but then recovered later in the session after the FOMC statement.

USDX4

USDX daily Cloud: price is still below both the 4hr and daily Cloud though which is bearish and suggests SHORT US$ trades.

USDXdailyCloud

EURX daily: the bullish recovery, as part of the Bear Market Truncation pattern, continues here:

EURXdaily

EURX daily Cloud: the index is trading within the daily Cloud for the time being. Any new close above this resistance will mean the EURX is aligned for LONG EUR trading:

EURXdailyCloud

S&P500 30 min: a choppy session with falls following weaker than expected GDP but a recovery after FOMC. It is worth noting that the DJIA closed above 18,000 support, the S&P500 closed above 2,100 support and the NASDAQ closed above 5,000 support. So, all in all, the news isn’t that bad:

S&P30min

Silver: also choppy whilst the Fed minutes are digested. The monthly chart triangle trend lines are the ‘bigger picture’ levels here though:

SilverDaily

Gold daily: looks set to close above $1,200 but may have embarked on a bullish wedge breakout. Watch for signs of continuation here:

GoldDaily

Oil: enjoying the weaker US$ and the better than expected Oil inventory data:

OilDaily

Forex: NZD Interest rates have just been released and the BoJ release their rate data later today. Tonight brings CAD GDP and US Unemployment data.

E/U: this pair continues to make gains at the expense of the weaker US$. It has pulled back to test a broken 61.8% fib level from the 2000-2008 swing high move. This fib is near the 1.12 region and this is the level to watch in coming sessions:

EUmonthlyCloud

The E/U daily chart shows the Bear Market Truncation pattern playing out here too. The next test for this pair will be whether it can close and hold back above the 61.8% fib at the 1.12 region. If so, that may enable a new entry level for a possible LONG move back up to test 1.18. Much will depend on whether the US$ continues to weaken though:

EUdaily BearMarketTruncation

The 4hr chart shows how the triangle breakout has continued:

EU4

The 30 min chart shows how a decent trend trade was possible during the US session:

EU30min

E/J daily: Bear Market Truncation progress here too. This chart shows how price is back near the S/R region of 132. Watch later for BoJ news:

EJdaily

E/J daily: The 132 region is near the 50% fib of the 2008-2012 swing low move and this is the region to watch in coming sessions:

EJmonthly

A/U daily: this has held above the 0.795 level from the channel breakout. Further US$ weakness would support continuation here. Watch for a hold above 0.795:

AUdaily

A/J daily: note from the condensed chart how price is back up just under the key 96 level. A new close and hold above this would support continuation. Thus, 96 is the key level to watch here in coming sessions. Watch today with BoJ news:

AJdaily

G/U weekly: Price has made it up to the 1.55 region. So, where to from here? Any close and hold above 1.55 would suggest, to me at least, the 61.8% fib region near 1.60 would be in focus:

GUweekly

U/J daily: still consolidating. Key 118.5 support is nearby and is the level to watch in coming sessions:

UJdaily

Kiwi: The RBNZ released Interest Rate data this morning. The Kiwi was hanging near the 0.77 level prior to this news as the following charts show:

Kiwi 4hr: prior to RBNZ:

Kiwi4

Kiwi daily prior to RBNZ:

KiwiDaily

The RBNZ kept interest rates on hold at 3.50% but some jaw-boning at the press conference has pushed this pair lower. The daily chart’s wedge trend line will be the support to watch in coming sessions if this weakness continues:

KiwiDaily

GBP/JPY: the wedge breakout continues. Watch for BoJ news today:

GJdaily

The G/J monthly chart shows how price is back near the 50% fib of the 2007-2011 swing low move. This fib is near the 184 level and will be the level to watch in coming sessions for any continuation move:

GJmonthly

Loonie daily: I’ll be watching to see if the daily 200 EMA offers any support here:

LoonieDaily

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