Highlights and themes
- The US dollar has been extended with extreme sentiment, and a pullback was expected.
- A few dollar crosses had recent DeMark 13s – including the Swiss Franc, Euro, and British Pound with very oversold sentiment.
- The wild card has been the Yen which didn’t give us the Sequential as it remains pending. There was an Aggressive Sequential 13, so maybe that will be the one that matters as sentiment has also seen some gains, which is a macro concern as the last time this happened was last summer, and that saw carry trade unwind.
- The risk of a carry trade unwind hasn’t really shown up yet. A break of USDJPY 150 would probably get some alarm bells ringing and that’s a way off.
- China Yuan with a decent reversal last week – gaining vs Dollar.
- Bitcoin has both upside and downside wave patterns, and I will explain both scenarios. Ethereum didn’t get the memo as it continues to trade well off recent highs.
Comments on charts. If you have questions or would like more context, please email.
Currency Sentiment Overview
Currency sentiment highlights
US Dollar Indexes
DXY US Dollar Index daily backed off after recent Sequential and Combo 13’s. The rule of thumb is when there is a Countdown 13 a price reversal or pause is due within 12 days (or bars depending on time frame). I said I was still watching the Sequential 13 as it still was within 12 days and with the Combo 13 and sentiment so extreme a pullback was due. Breaking the 50 day now has Setup on day 4 of 9 with TDST Setup Trend support at 106.04.
DXY US Dollar Index weekly backed off hard and quickly this week.
Bloomberg US Dollar Index daily reversed with Setup 9 due on Monday. That will cancel the pending upside Sequential.
US Dollar bullish sentiment broke the recent range. Next target is 50% midpoint level and we’ll have a better idea of what is next.
US Dollar Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
Major USD Crosses
EURUSD Euro / US Dollar reversed with the recent Sequential 13. Upside Setup on day 7 of 9 and above barely the 50 day.
Euro bullish sentiment with a reversal up from oversold levels.
GBPUSD British Pound Sterling / US Dollar with a decent reversal after the recent Sequential and Combo 13’s. 50 day resistance next hurdle.
British Pound Sterling bullish sentiment with a reversal
AUDUSD Australian Dollar / US Dollar with decent reversal despite the pending Sequential. Expect a Setup 9 on Monday which will cancel the pending Sequential left on day 9 of 13.
Australian Dollar bullish sentiment with strong reversal
Australian Dollar Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
USDCAD US Dollar / Canadian Dollar still has the pending Sequential
Canadian Dollar bullish sentiment trying to turn higher
Canadian Dollar Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
USDCHF US Dollar / Swiss Franc with recent Combo 13 and reversal. Watch the Setup 9 expected on Tuesday.
Swiss Franc bullish sentiment trying to turn higher.
Swiss Franc Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
USDJPY Japanese Yen daily still has the Sequential pending on day 8 of 13. Some Yen strength but holding 50 day
Japanese Yen bullish sentiment has turned off the lows but stalled on Friday
Yen Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
Crypto
Bitcoin daily has both an upside and downside pattern I’m watching as it consolidates.
Bitcoin bullish sentiment back to the extreme zone
Ethereum continues to hold recent lows but well off recent highs. 3k has important support at 200 day which has been flat.
Three major Yen crosses
Crosses still look decent vs Yen despite a little gain for the Yen this week. Pending Sequential Countdowns for Euro and GBP should see 13’s this week and then possible Yen strength.
EURJPY Euro / Japanese Yen
GBPJPY British Pound Sterling / Japanese Yen
AUDJPY Australian Dollar / Japanese Yen
US Dollar vs Emerging Markets
USDBRL US Dollar / Brazilian Real could see continuation with Sequential to 200 day
USDMXN US Dollar / Mexican Peso trying to turn after a weaker period for Peso
Mexican Peso bullish sentiment back to extreme zone again.
Mexican Peso Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
USDZAR US Dollar / South African Rand will get the Setup 9 on Monday
USDCNH US Dollar / Chinese Offshore Renminbi (Yuan) also saw a big reversal. Will the Setup 9 reverse the move?
DeMark Sequential Basics from Bloomberg
Detailed Commitment of Traders explanation
