(Makor) Some Interesting FX charts: USD Index, EUR/USD, USD/CAD & USD/JPY

Some Interesting FX charts: USD Index, EUR/USD, USD/CAD & USD/JPY

Short USDJPY is now the largest position in the G4, roughly $7.5bn. When markets are hit with a volatility shock, risk management is going to force you to close your largest longs and shortest shorts. If we take the Commitment of Traders report as a good measure of exposure – JPY is now the largest long, and the USD is the largest short.

 

Something I missed on USD/JPY and just realized ! The Bearish H&S pattern which was triggered on the break below 116 targets 106.1 and this target has now been met so on top of all the tech reasons to like being long USD/JPY as mentioned in the previous email which is attached below we also have a topping pattern with a target that was met – not a sign for the reversal I am looking for but definitely gives some hope.

 

 

 

From: Barry Lyss
Sent: Thursday, May 5, 2016 5:30 PM
Subject: Some Interesting FX charts: USD Index, EUR/USD, USD/CAD & USD/JPY

 

 

USD Index (93.50 last) – bull case alive above 92 support area

 

·        The highlighted Elliot wave count on the charts suggests that we are now at the start of a wave 5 within a bigger wave 3.

·        Based on the height of wave 1 of 3 the ideal target for this move is 103.23

·        Based on a Fibonacci extension of 161.8% of wave 1 the target for wave 3 is 103.31

·        I like the fact that we get a similar target zone of 103.23 / 103.31 based on 2 different Fibonacci extension waves.

·        This view is consistent with the views on EUR/USD, GBP/USD, USD/CAD & USD/JPY.

·        Given this view I will exit the long NOK/SEK trade idea at market level for 0.55% gain (long from 0.9880 exit at 0.9935)

 

 

Weekly chart

 

EUR/USD (1.1422 last) – bearish case persists as long as below 1.1714

·        The current consolidation seems to be one that will eventually end with a downside break.

·        It is hard to pick an exact level but if this is indeed a consolidation this should eventually end with a downside breakdown and the CCY pair should not take out 1.1714.

 

Strategy:  short 1 unit from 1.1590, target 1.08 with a stop at 1.1725.

 

Weekly chart

 

 

 

USD/CAD (1.2837 last) – Bullish wedge breakout argues for a move higher

 

·        The break out from a wedge pattern is bullish, the breakout level is 1.2730 and the target is 1.3509

·        The cycle low at 1.2461 should not be taken out

 

Strategy: Long 0.5 unit from 1.2770, target 1.3500 with a stop at 1.2448.

 

Daily chart

 

 

USD/JPY (107.30 last) – Bullish case alive above 105.23-106.57

 

·        I have been long and wrong about this move but I still believe the odds to see a move higher exist.

·        The 38.2% Fibonacci retracement level of the entire 2011-2015 bull cycle stands at 106.57 AND the 200 week moving average stands at 105.23 – while above those 2 levels a move higher could still be on the cards.

 

Strategy:  Long 1 unit from 108.1450, target 120 with a stop loss on a close below 104.80.

 

 

Weekly chart