Mercury

Aligned to the Stocks move on US open, or just before in fact, the Yen has failed the breakout retest and now put in a lower low. It is not over yet for sure as the US open will doubtless put in a bit of bull/bear clashing before resolution but the odds seem to favour the bears at present.

Why so sad? More like Fib 62% it seems. Break lower on FTSE100?

Another round trip down?

So Brent did indeed stay within the channel, retrace consolidation, whatever it turns out to be. I am Long off the bounce and holding to see if we get a breakout through the top this time. The EWT set up supports this and perhaps a lower USD will give Oil a bit of short to medium term impetus.

Big reversal in the past few hours. My weekly chart trend line was not mapping correctly to the 1H, a major flaw of PRT. I have corrected it and now the set up looks more like a wave 1 turn on the weekly resistance channel line. If correct we should see a retrace, likely a fairly significant one that should close the small price gap around the Fib 50% and maybe do a retest of support at the Fib 62%. Might also get a retrace on GBPUSD in tandem.

Hello!

Breakout? If so then this is off a shallow Fib 23% retrace, which together with the long term resistance trend line break, horizontal resistance break and oscillators coming out of oversold should push the breakout hard. Perhaps from a fundamentals perspective the poor US data so far this week is eading traders to think Powell will go more dovish, thus giving Trump what he wants so everyone is happy, except Lagarde...

Should be relying on the technicals more I guess...

Up! The question is not up or down at this juncture, as I outlined in my other thread, GBPUSD has already turned bullish and broken out of key resistance. The question is now how high? The 2 scenarios I have in play (on different threads) are: The rally is a retrace/relief rally that will culminate with a turn back down and major bearish phase as USD rockets, possibly on major market wide and economy wide crisis. The one way bet on GBP going down, as outlined above, is over done; too many Bears on one side of the equation, the market confounds this zeitgeist and breakout out of long term resistance to rally on up. The key point is probably around 14,000 initially, which is the long term resistance trend line and after than a horizontal resistance area at circa 14,400 but the big one is 15,000, which is the top of the Brexit referendum spike. We should see which scenario plays out in the coming months, won't have to wait years I feel... But if you are looking for more certainty, well, let us know if you ever find it...

10820 for me @Level_Traderbut I agree with you overall. First though, given stocks and USD relief rally, and based on this pairs own intrinsic technicals, I see a rally back to the 10900ish area for a retest on the daily channel line, the prior bear move pennant breakout and the Fib 50/62%. The bear move looks like a clean 1-5 (motive trend direction change if we then get an A-B-C and lower low) and the was PMD at the recent wave 1 turn. As I mentioned in my stock indices thread I think ADP and more likely US ISM non manufacturing data may play a role here, one way or the other.

So is that all the bears are getting? I doubt it. Looks like the "positive" German PMI Services reading is cause for the Permabulls to buy the dips on top of the positive German Manufacturing PMI print on Monday. But hold on! The Manu print was a "massive" 0.3 above consensus but still below 50 (44.1, a long way below 50) and the Services today was a "massive" 0.2 above consensus (51.7, still above 50). German is an economy dominated by manufacturing and heavy engineering and if you look at the trends on both metrics it is down. In between all of this we got poor US manufacturing data, which sent the markets down on Monday. ISM services for the US and ADP coming up, let's see... On the technicals, just looking at the Dax, the sharp drop could be the same kind of "correction" we have seen previously except that oscillators are yet to hit oversold on the daily charts as they did previously. Also we have a breakout of the daily channel. At present this looks more like a relief rally to me off 1H PMD at short term support, which is exactly what one would expect for a short term wave 1 turn so I would be looking for a top out retrace (A-B-C) at key resistance across the board. Perhaps ADP but more likely ISM and US open will tell this tale. For me there is more to go on this bearish phase before we maybe get that Santa rally (or maybe not..!).

Is CAD about to join the party? Potential channel breakout after an extended consolidation phase.

USD DX is at the first of two important support levels. A break here should result in a drop to the next and crucial support level, a break of which would surely cement the bear phase... Possible relief rally before the break of the channel to watch out for.

Not sure what you mean? Looks more like the lower channel line has held and we have a small rally off it so far. Of course it could reverse and breakthrough the lower channel line but that is a perfectly legitimate resolution to a wedge consolidation. Chartists will trade which ever breakout occurs (up or down), just have to watch out for the all to frequent these days fakeouts, which many do attribute to algos.

Nice breakout this morning, still to be confirmed with a close above but very encouraging. I expect to see a similar breakout on EURUSD and USDJPY moved lower overnight (still have a recent low to eclipse just below). Stage seems set for the USD bear to get going...

USDJPY is setting up to make a run at the lower channel support line. A strong break here will be bearish for both USD and Stocks IMO.

Overnight we saw a bounce off the daily channel line on the Nikkei, which then rallied to close the gap but turned at the Fib 62%. Great place to get Short, which I did, especially as I saw the Yen strengthen ahead. Setting up for another test of that lower channel line. Meanwhile the FTSE100 appears to have got it right and continued to trade down while the Dax buy the dips boys made another attempt at BAU, some people can't give up on the never ending bull bias I guess, even temporarily... Gold and Silver is rising, as expected and I would also expect the Dax to keel over soon now that its gap is also closed. US large cap gaps present a bit of a problem but some of them (the Dow in particular) look too far up to be closed any time soon.

GBPUSD is testing the upper consolidation Flag line and approaching a key resistance zone (13,000). If we see a strong breakout here then the next phase rally will be underway. EURUSD is also approaching a key resistance zone and AUDUSD continued its rally phase overnight.

Vix has broken out just as it did the last 2 times we got a sharp bear move on stocks @Kodiak. It is more confirmation that we are set to get a persistent bearish move for at least the week to come. Longer term, regardless of whether this is the end or there will be another leg up on US large caps, the DJTA is not looking too happy having topped out back in Sept 2018 and now turning lower too. Note the collapse in volume on the EFT. Doesn't bode well from a Dow theory perspective... Note also the volume profile for the SP500. The spikes in volume are all on bear days, otherwise the trend is down. Add to all that the fact that each time the US large caps make a new ATH they get smacked back down into the consolidation range. This will be the fifth time if price makes it back into the zone. When you look at it from this perspective and consider the current rally phase has staged a breakout through very long term resistance and now looks set to return below this again it looks like this could be the melt up some have been calling...

Ah yeah so it seems stocks really can go down as well as up, who knew... Well over 70% of IG clients trading the various stocks indices did I guess... We didn't have to wait for the ISM manufacturing data, although that seemed to provide a push once things got going. The Dax keeled over after a failed retest of the daily channel line that it has previously broken, with an overshoot spike through to the Fib 88%. Once this rebounded back below the channel line a good Shorting opportunity presented itself and with the FTSE showing a similar reversal and SP500 turning after a fresh ATH and dropping through short term support there were several trades on this morning for those with an open mind to it. The Nikkei is on a significant support level at a daily chart channel support line, let's see what happens when the Japanese markets open... A break here would be significant after the Dax channel break and FTSE100 resistance hold. The ISM data release produce a small price gap, which may get filled, at least on some indices, before a continuation of the move but maybe not. There are still several un closed gaps below, which I expect to be filled before any next stage rally and then we will see...

In addition to the other USD pairs AUDUSD looks to have put in a retrace turn as well, right on the Fib 62% with PMD. The rally is very strong and consistent with a wave 3 move. The next important juncture will be a test of the down sloping channel resistance trend line.

The reason GBPUSD may lag EURUSD in terms of a bullish breakout is that the EURGBP third leg of the Triad is signaling a bullish phase for EUR, that is likely to be a temporary retrace, which once over could signal that strong bear move I have been tracking. Of course GBP could still go up but just more slowly. From a fundamentals perspective this short term situation is likely to be election driven.

USDJPY backs up the Doji candle a significant bearish drop, which confirms the doji as a turning signal for me, in addition to all the other signals I reference and importantly the fact that both USD DX and stocks took a tumble today. Now price is heading for the lower channel line, a break of which could signal a long term bearish phase, which is in effect a continuation of the previous bearish phase and the Triangle price is currently contained in would be merely a consolidation retrace within this longer term move, as previously suggested may be the case.

Obviously I don't concur with the IG analysis @CharlotteIG, but it wouldn't be much of a market if everyone agreed. I see that set up as consensus but I am minded to the contrary for many reasons, some of which I outlined in my alternative GBPUSD rally thread last weekend. From a technical perspective, once price made a new lower low on this bearish phase and then immediately rebounded back within support level in a 1H chart pin bar, that then carried back up to short term resistance and put in a daily chart pin bar reversal candle on the Fib 62% and completed and A-B-C pattern in the process with positive momentum divergence I discounted the break lower and set up for a rally entry. In fact I entered after the 1H pin bar and added after the short term 1-2 retrace, which failed the channel retest at the Fib 50% as forecast (see 1H chart below). I added again on the breakout of the short term resistance and now price action looks to be setting up another test of the weekly down sloping resistance trend line. A break of this will be very bullish and if my GBPUSD contrarian rally scenario plays out (it isn't yet but that is expected, see my Triad thread) then this move of EURUSD could be motive rather than retrace so I am thinking to hold my Longs for the long term, but lets see how it shapes up.

The day isn't over yet but so far things are shaping up nicely for my reversal call. After the pin bar I noted in the previous post today USD has taken a tumble. There was significant NMD at the pin bar and now price is heading to test the weekly channel line. A break of this, and associated USD pairs related critical points, should kick off a sustained period of bearishness for the USD.