Currencies

When I was working full time at a hedge fund I kept a closer eye on the big currencies: DXY, EURUSD, USDJPY, AUDUSD. Here are a few notes of interest. 

DXY W
Broken out of 18 month range in very bullish fashion The lines are drawn at the March and May 2015 high and low closes which defined the range until last week. 

DXY D
The usual pivots chart - above Q4R2, tagging NovR2. 

EURUSD
Has not yet broken the 2015 lows, but looks like it could go that way. There is a vote coming up. Given Brexit and TrumpIt, probably markets will decide to go against polls heading into the vote - likely bearish Euro. 

EUR broke the 2HS1 without any attempt at bounce. Below Q4S3 is 1.04 area, then YS1 down at 1.02. 

AUD D
Not only reflecting USD strength, but perhaps some China weakness as well. 

Currencies

I am not a currency trader but some of you might be and due to correlations in the markets think worthwhile to check up on these at least once a week.

DXY below all pivots and looks like we should see that 1HS1 level at least. 

DXY also below Q2P and AprP with no immediate support. 

Here are all long term and medium term levels on one chart.

EURUSD above long term levels and may see 1HR1.

EURUSD did tag Q1R1 on the last day of the quarter.

USDJPY breaking YS2! This is a big deal. Bearish below that level 110.62. 

Since announcement of negative rates USDJPY has been sharply lower; below all pivots from 2/3/16.

AUDUSD top on 1HR1 but still above YP. 

GBPUSD W under YP / HP from the start. Second break of YS1 in last 3 weeks is bearish. Trying to hold 1HS2 now. So from here I'd say a break below 1.4007 should mean down to the lows or YS2 1.371.

Q2 moving sharply lower so far, already from Q2P to 1HS1 and break of AprP and YS1 in the process.

Lastly the digital currency wish I knew about earlier. I thought bitcoin might get a run this year but alas right idea wrong vehicle! ETHUSD "Ethereum." 1 day break of AprP and recovery, note March low was exactly on the pivot. 

Currencies

Seems like we should see a long term support level on DXY, so that means lower. 

With new Q2 and Apr pivots just 2 days away I will just go straight to quarterly and monthly charts. Actually that is classic BB & RSI divergence on the 2015 Q4 bar. No one should be surprised at some selling here. 10MA far below, room for more pullback. 

Although the M chart looks more bullish, just drop to nicely rising 20MA with RSI in uptrend buy area. Not sure which chart wins here. 

EURUSD lifting up from YP again, will it reach 1HR1?

EURUSD Q chart bounce with similar BB & RSI divergence. 

Although also heading into falling 20MA, near test once so maybe clears this time.

USDJPY low on YS2, but upside limited if USD is weak. 

Now there is a good example of the importance of this exercise... 2015 Q4 small blue bar with wick and lower close that high begs for a drop in the next bar, and that is how it played out. 

Small blue bar in 2016 Jan too, so once Q and M chart showing weakness there was meaningful drop. 

AUDUSD decent rally from 1HS1 along with GLD. Almost tagged 1HR1 but above YP for the first time in quite a while. I also mentioned this as long term buy and hold possibility for this reason a couple weeks ago.

Seems like bounce more to go on this Q chart. 

But M chart heading into falling 20MA, watch for resistance. 

Back in February I noticed that BTCUSD looked good above all pivots, and though if there were stories about $ getting out of China, gold up etc then a digital currency might get a run. It didn't do much. Too bad I didn't know about Ethereum, up to 1530% this year at the highs from 12/31/2015 close, and still up a decent 1190% to today :) Above all pivots with clear support from 1/16-17 of this year and monthly pivot holding the pullback both in early Feb and exact low in March!

Currencies

There have been fantastic moves in every other asset class but currencies have been chopping around (I don't follow soft commodities). One of the the worst parts of any trading strategy is chop. It is rare but can happen with pivots and stock indexes too; if a level that usually works just doesn't for 3 tries in a row call it day and come back in next quarter. 

That said there were some levels on the 3/17-18 turn.

DXY W dropped below both long term pivots but rebounding before reaching a long term support level. 

There's the rebound from Q1S1 so at least there was a level on the turn. 

All levels; reclaiming YP would be bullish, but hesitant to take any currency trades with so many moves failing with much better movement in other asset classes.

EUR W chart also looked like rally on but dropping back to test the YP.

No level reached on the recent high before a fade qualifies as chop.

USDJPY W, now that is a nice turn bang on YS2!

Time limits currency check to once a week, but that was a decent spec buy setup as of 3/21, with clear hold of YS2 and lift from 1HS2.

AUDUSD W, did not quite reach 1HR1.

At least rally reached Q1R2 so cannot complain too much. Better entry above 3 pivots on 3/3 chance for gain.

GBPUSD maybe returning to status of "below all pivots." 

Currencies

Now that the circus is over let's take a look. For these charts I am going to post daily chart pivots only (Y 1H Q1 and month, but no S/R) and we can arrive at some simple conclusions.

DXY has been chopping with several failed moves (by failed I mean above/below all pivots and not reaching a real resistance or support area). This is the worst that can happen with this method - chop. Is this finally the move for real? This will be the 3rd time below all pivots. After the second time, the recovery was very weak. Maybe so.

EUR looks like DXY in reverse, also the 3rd time above all pivots for the charm?

Everyone pointing to USDJPY & SPX etc correlations have suddenly gone quiet. 

AUDUSD above YP and so all pivots for the 2nd time. Maybe definitive given gold. RSI not ideal but not much to risk for long term buy and hold idea if you have some sideline cash. 

Currencies

There is no doubt that pivots work on the currencies, but this year has been relatively stuck in range with a few fake-outs. DXY D chart below, and you'll see the YR1 and YR2 was basically the range from May to November with the exception of just a few days that came back; and then when it finally broke out of that the high was bang on a 2HR1 level.

But this year it moved above all pivots in January but didn't reach any resistance; fell under the FebP and that was the only real move of the year, did break YP to be below all pivots but didn't reach any support level; then came back; above all pivots again, then another fail! What to do here? Not sure. Another very good technical strategist, AC Parets of All Star Charts, likes to avoid asset classes with a flat 200 daily moving average and maybe that is the lesson here. 

Or, with really 3 failed moves in DXY this quarter you could just say enough chop and not take any signal until next quarter. 

EURUSD close to being under all pivots again. It has had this status several times this year without a real drop. 

USDJPY was the best currency move this year with clear rejection of all pivots 2/2-3 and down to a low bang on 1HS2 which was also very near YS2 level.

AUDUSD is doing something interesting too, rallying from its MarP at the start of the month, above Q1P on 3/2 then above 1HP on 3/3 and now testing its YP! AUDUSD has been completely below its YP on a weekly close basis from May 2013! This would be a massive status change to clear that level. This move maybe helped by the gold rally. 

BTCUSD held YP as the low of the year several times, and the high of the year very near FebR1. Now back above 3 levels, and below only the monthly. 

Currencies

Weekly report as time permits.

DXY weekly with long term levels only; recovery of YP and HP after 1 week break is bullish and targets 102 area if 96-97 holds. 

And here is the daily chart with all levels; the MarP is basically same the QP 97.67 and 97.66.

EURUSD below all pivots. Note hte small orange dots near yesterday's low is the FebP and not in play anymore. 

USDJPY held 1HS2 on the lows, but stil under YS1 / 1HS1. 

AUD above MarP and testing QP. It has been up here a bunch of times so maybe it will clear. IF so then headnig into 1HP above. 

BTCUSD pivots definitely seem to be in play. 

Currencies

Weekly report if time permits on the major crosses. On all charts, I am showing yearly and half-year pivots (long term) on weekly chart and then daily charts with quarterly and monthly (medium term). 

DXY reclaimed YP & HP, bullish. 

Testing QP here, to watch. Back above would be bullish and possible long (above 3 / 4 pivots, and 4th expires end of month) but rejection puts it back into congestion, no trade. 

Similarly, EURUSD breaking back under YP and HP, bearish if maintains. 

But sitting right on the QP here so no position edge until we see reaction from that. 

USDJPY got smashed from the YP, broke the YS1/ 1HS1 combo, and back to 1HS2 / YS2 area. So major support 110-111.

You can see the QP 1 day recovery and subsequent rejection, back under all pivots as of 2/3. Down to Q1S3 here.

AUDUSD not moving that much, but below YP & HP.

QP rejection in larger downtrend usually good setup as short. 

GBPUSD has been in the news recently. From Pivots it has been clearly weaker since Q4 2015 under YP and HP despite trying a few times to reclaim. 

2/16 would have worked as a short, back under all pivots with clear break of FebP. 

Lastly BTCUSD. I was hoping for real run with lift above major pivots first time above both since 2013!

The high was FebR1, but let's see what happens. 

Currencies

To make larger trend status easier to see, here are charts of the main crosses using pivots only (no S or R levels.)

DXY broke YP 4 days but has recovered. Still below 3 other pivots. 

EURUSD recovered its YP for several days, but maybe breaking today.

USDJPY broke under all pivots convincingly on 2/3 and then had a big drop. While we can check various S levels, unlikely to change status in near future. 

AUDUSD holding on to FebP but below the others.

Currencies

Pivots work on these too. Usual big picture view with long term pivots only on DXY, EUR, USDJPY, AUD. 

DXY broke 1HP and testing its YP at 96.48. What matters here is the close of this week; above the YP probably bullish, definitely bearish below. Note DXY has been above its YP since clearly & launching in August 2014, so a break is an important shift in a long term trend. 

EUR mirroring USD here, with break of YP in 2014 then huge slide. So far above its YP for the first time since 2014.

USDJPY has been all above its YP since Abe came on the scene in late 2012 - what a run. The HP showed some weakness in 2H 2015 but the recent negative rate news led to a clear rejection of both the 1HP and YP which I think will be definitive. For now watch YS1 / 1HS1 combo at 115.41 / 115.75.

Lastly the AUD has been below its YP since 2013 with crystal clear rejection in 2014, followed by a big drop. Trend still down but recent low held 1HS1. It would need to clear the 1HP / YP area .7311 / .7496 to turn positive. 

Currencies

Do pivots work on currencies? Yes!

DXY W with long term pivots. DXY lifted above its YP a few times in 2013 only to stall. But in 2014 it tried again and a tremendous move followed, with a key retest high bang on 2015 2HR1. Note this week's break of the 1HP and test of the YP at 96.48 - a huge level to watch going forward.

And here's the Euro, EURUSD. The break of the YP in July 2014 led to a huge drop. Like the DXY testing its YP, the EURUSD also tested its YP for the first time since July 2014 this week.

USDJPY was in the news this week. It has been completely above its yearly pivot since late 2012! But this week the YP broke for a second time, and that should be definitive this year. If YS1 / 1HS1 combo near 115 breaks, then next major support is 110-111.

And the AUDUSD has been completely below its YP since May 2013. China slowdown? Not a surprise here. As long as it stays under the long term pivots of 1HP .731 and YP .749, trend is down.

Lastly, do you think pro Bitcoin traders are using pivots? 2014 highs on the YP / HP combo, 2015 low on the 1HS1 exact and 2015 high very near the YP / 2HR3 exact, and recent support on the YP near exact. Hmm.