One other note. The recent highs also are a 127% Fibonacci extension of the highs 2008 to the lows in 2011.
Blake Morrow
Chief Currency Strategist, Wizetrade
The USD/NOK is breaking out of what “should” be a bullish wedge (defined by higher lows and equal highs and typically will break higher) but is actually breaking lower. This break lower also coincides with crude oil, which also looks like it is trying to form some sort of near term low. For those who are unaware, the NOK and Oil tend to have a strong correlation due to Norway’s being one of Europe’s largest oil exporters.
The GBP/USD hourly chart has a possible cup and handle pattern if the hourly chart can push past the 38% retracement level and horizontal resistance that resides at 1.5225.
If the GBP/USD can break higher, the upside target resides near the 61.8% retracement and trend line that has been in existence since July 2014.
Blake Morrow
Chief Currency Strategist, Wizetrade
Disclaimer: I am not long the GBP/USD but may establish a long position within the next 72 hours.
This is a monthly chart of the NZD/USD but probably one of my favorites. The reason why I love the long term charts like this is it provides me a “road” map for a bias longer term and allows me a more directional view when trading intraday or swing parameters.
This chart has a double top near the .8840 from 2011 and 2014. Support is a spike low from 2011 at .7370. A break below suggests a “long term double top” is now in play and a move to .6000 for 2015/2016 may be in the works. Considering the BOC surprisingly lowered rates last week, commodity (broad) weakness, deflationary pressures globally, and the fact that most banks are assuming the RBNZ raises rates another full basis point in late 2015 or 2016, s shift in expectations moving forward could drive the spot price significantly lower.
Here is the chart:
Blake Morrow
Chief Currency Strategist, Wizetrade
Disclaimer: I am not short the NZD/USD currently
The USD index (today) has stopped near its 50% retracement of the highs in 2001, to the lows set in 2008, at 95.48 (50% retracement is at 95.85).
The reason why this should be alarming for USD bulls is the “last time” we had a major bounce from 1992 – 2001 the USD index also stopped near the 50% retracement (high was 121.02 and the 50% retracement was at 121.46).
H/T to @keepitrealdude for bringing to my attention.
Blake Morrow
Chief Currency Strategist, Wizetrade
Disclaimer: I am long USD through the AUD, NZD and CAD crosses. Yes, I am nervous.
Silver has broken a major down trend line, and like it’s sibling (the shiny yellow metal), it is breaking out. The downtrend line has been in existence since its peak in 2011, and we are now testing previous support at the 18.22 level (from 6/2013). This breakout could expose a retracement move towards the $26 (previous support 2012/3) or the $28 level which would represent the 38% retracement of the move from near $50 to the lows below $15.
Here is the chart:
Blake Morrow
Chief Currency Strategist, Wizetrade
The EUR/GBP is testing/breaking a very critical support level which also represents a 50% retracement from the 1999 lows to 2008 highs. That level is at .7750 (approximately).
Here is the chart:
This is one of the most heavily traded currency pairs in the FX market, so this pair could heavily influence the GBP and EUR on the crosses.
Blake Morrow
Chief Currency Strategist, Wizetrade
Disclaimer: I am looking to establish a short in the EUR/GBP in the next 72 hours.
The GBP/NZD is in process of carving out an intraday inverted head and shoulders pattern. However there is a lot happening in this chart to assist. Take a look:
The 4 hour chart broke to new trend lows after coming out of a triangle consolidation pattern. That likely tripped a lot of “long stops” and signaled new shorts for trend traders. However, the reversal back above the 1.9350 level exposed the possibility of a short squeeze after a false break lower. The current inverted H&S pattern looks set to target the (purple line) down sloping trend line that comes in around 1.9880 after the move above 1.9615 (previous support) today.
Blake Morrow
Chief Currency Strategist, Wizetrade
Disclaimer, I have been building a long term “long” position in the GBP/NZD
I have to break today’s EDGE Chart of the Day into two chart. First is the daily chart od the USD Index, DXY:
As you can see in the “Daily Chart” We have completed two flag patterns. But what is more important is the weekly chart:
We have rallied to major resistance (blue line) from 2005, and very close to the highs at 92.63. (overnight, the high was 92.52).
I suspect the recent run higher in the USD has run its course, or it is close to running its course. There are 3 key events at the end of the month. ECB Meeting January 22nd, Greek elections the 25th, and FOMC Meeting on the 28th. After such an amazing US Dollar bullish run, I suspect that the market could get a little choppy as we complete this major technical pattern so close to key resistance ahead of these key events.
Blake Morrow
Chief Currency Strategist
The CAD/JPY 4 hour chart looks set to play out a bear flag, possibly taking the pair into new trend lows. The key components of this chart is the rejection (late December) of the 61.8% retracement level near 104.00. The pair has barely bounced as (both) risk and crude oil has bounced today. Should stocks and/or crude oil roll back over in the coming sessions we could take on levels below 100.00.
In addition, the White House is threatening to veto any bill on the Keystone Pipeline which should keep downside pressure on the already weak CAD currency.
Blake Morrow
Chief Currency Strategist, Wizetrade
The USD/SEK is approaching critical resistance on the weekly chart as we approach the 8.0000 level. Like the EUR/USD as it approaches the 1.1700 level (critical support of 1.1639 Nov 2005 lows) a lot of these levels will hold or break dependent on the actions of the ECB in the coming weeks.
The USD/SEK 8.000 level (as seen below) has a confluence of the 61.8% Fibonacci retracement level from 2008 highs to 2011 lows. Also a 161.8% Fibonacci extension from 2012 highs to 2013 lows. This confluence (approx 8.0000) will be a major congestion level until after the ECB meeting January 22nd. I suspect a break or rejection of this level will take place following the ECB meeting.The ECB will influence the EUR/USD exchange rate which tends to be an inverse relationship to the USD/SEK.
Blake Morrow
Chief Currency Strategist, Wizetrade
Disclaimer: I have been long the USD/SEK exchange rate for the last several weeks.
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