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After the first quarter equity volatility, one of the big takeaways with many conversations I had with clients was the lack of volatility within currencies and rates.  Now that the equity markets have somewhat stabilized in May, both currencies and rates are started to move.  Back in February and March, with the downside DeMark daily signals on the USD, sentiment that was very low, speculator positioning set up on the bearish side of neutral, a move higher was expected.  That move started in mid April has pushed higher for a month now and bullish sentiment has moved to bullish extremes on USD and the opposite on major crosses to the bearish side.  The extreme bullish positioning on the Euro with speculators has not come down much still leaving a lot of fuel for a Dollar squeeze.  The wave pattern on the USD has this move up in a wave 3 of 5 wave move.  The next move will be wave 4, a corrective wave lower (It will trigger when it makes a 13 day closing low) followed by an upside final wave 5 that will surpass the high of wave 3 where ever that ends. At the bottom of this note, Gold and Bitcoin are analyzed too.  Naturally I will keep all of you up on the developments as they occur on the Hedge Fund Telemetry Daily Note.  Please email if you have any questions or comments.

Brief:  Short term overbought USD with sentiment at extremes should see a pullback imminently.  Keep in mind most of these are USD vs ... and thus some are inverted.  

US Dollar Bullish Sentiment is at 88%

Commitment of Traders report shows speculators starting to turn positive (barely but still)

US Dollar had an upside pink Combo exhaustion on Thursday.  It remains on day 9/13 with red Sequential upside Countdown.  Corrective wave 4 in order to trigger needs to make a 13 day closing low.

Euro Bullish sentiment is at 10%

Commitment of Traders report shows speculators starting to work off their very very bullish positioning.  This is fuel for a much higher move in the USD and lower in the Euro.  

EURUSD daily broke down out of the Q1 tight range and also had a pink Combo downside exhaustion 13 last Friday and is on day 8/13 with red Sequential Countdown.  This is due for a bounce

British Pound bullish sentiment is at 20% and at the low for this down move.  It has been lower in the past and I would not doubt it moves lower eventually.  

UK Pound Sterling is oversold and did have the pink Combo late last week and is on day 8/13 with red Sequential

Yen bullish sentiment is at 33% and not fully oversold

USDJPY daily should see the Yen bounce short term with the green Setup 9 and then lower (inverted)

Canadian bullish sentiment is at  21% and is getting oversold

CAD should bounce further vs the USD  as it is on day 4/13 with its red Countdown.

Swiss Franc bullish sentiment is at21% and up from a recent low of 7%

USDCHF daily got the upside pink Combo 13 and still has the upside red Countdown on day 10/13.  The wave pattern now has this in wave 2 of 5 so once this corrective pullback happens I expect further weakness with CHF.  

Australian Dollar bullish sentiment is at 22% and is oversold

AUDUSD daily should bounce from here yet the downside Countdown is unfinished on day 6/13

New Zealand Dollar bullish sentiment is at 22% and is oversold.  Will it V bottom or chop around?

NZDUSD daily  like the others had a Combo 13 exhaustion and is on day 7/13 with red Sequential Countdown.  A bounce and then lower is possible.  

USDNOK daily nailed the wave 3 price objective of 8.15.  Some sideways to corrective bouncing is due

USDSEK daily should consolidate further despite the red upside Countdown in progress

USDDKK daily is very extended and had two downside pink Combo exhaustion signals and is on day 8/13 with red Sequential Countdown.  A bounce is due

If there are any important crosses you would like me to add or send one off, please let me know

Mexican Peso bullish sentiment is at 17% and is at a low for this cycle down.  It can go and stay lower as you see.  

USDMXN daily has been weakening  and could become a little more volatile yet I still could see this weaken more with the elections in Mexico.  

USDCNH daily has stalled.  It will be interesting to see how this reacts post US/China trade comments

USDHKD daily has been pegged and moved on the China news

USDSGD daily should consolidate with the recent green Setup 9 and then move lower

USDINR daily is very oversold with recent upside exhaustion 13's   Nice 13 to 13 type of trade.  

USDZAR daily has moved lower now in 5 waves but did not come close to the wave 5 price objective.  Combo 13 like the others and on day 11 of 13 with red Countdown

USDRUB daily after the crazy moves with the increase in sanctions this has consolidated.  The wave pattern now has a wave 2 corrective triggered.  Watch for a more corrective action but I feel the RUB could move even lower.  

USDTRY daily actually started it's move in February sensing some stress in the market which the USD and Euro were steady.  In April there was both a Combo and Sequential signal that stalled things for a couple weeks yet this has reacted with the Dollar now making a real move.  As of now, this has an upside Countdown on day 4 of 13.  This feels like an oversold situation that could get out of control.  This is the risk in Emerging Markets

USDILS daily has a new green Setup 9 while a red Sequential remains on day 9/13.  

USDRON daily is oversold however the downside red Sequential Countdown is on day 6/13

USDCZK daily is oversold and like others had a pink Combo and is on day 9/13.  A bounce is due

USDHUF daily is very oversold with a pink Combo and red Sequential on day 9/13.  

USDPLN daily is also very oversold but the red Countdown is on day 7/13

USDARS daily like the Turkish Lira has been in the news.  This one had a lot of weakness early in the year against steady USD then went silent in March and April.  

If there are any important crosses you would like me to add or send one off, please let me know

EURJPY daily is consolidating.  A break of 1.30 has to be watched

EURGBP daily has now direction as both have been mauled

EURCHF daily did not complete the downside with the Euro weakness on day 6/13 with a red Countdown

EURCAD daily should see the Euro bounce as it hit the downside wave 3 price objective.  Failure to bounce would surprise

EURAUD daily still shows a Euro falling hard with it on day 6/13 with a red Sequential Countdown

If there are any important crosses you would like me to add or send one off, please let me know

The Pound is at an important level.  Watch for a break under 149 or over 150 for continuation

CHFJPY daily should be watched for the completion of the upside green Setup 9.  112 is a decent inflection point

AUDJPY daily should see the AUD vs JPY continue to increase to the wave 3 price objective of 85.23

Gold bullish sentiment is at  18%

Gold Futures daily is on day 3/13 with a red Countdown.  The wave pattern is potentially bullish if this can stay in Wave 2 of 5 to the upside.  This would mean it not breaking the December lows.  I'm neutral for now

GLD Gold ETF daily still has a downside red Countdown on day 4/13.  The better trade set up was back in December when there were downside exhaustion signals combined with low sentiment.  

XBTUSD daily just had a downside green Setup 9 and the 9's have been pretty good at inflection points.   This has upside potential with the wave pattern IF THIS DOES NOT BREAK THE RECENT LOWS AND THE APRIL LOWS.  I know it's a wide range but this is Bitcoin.  Again, if you buy it here, use ~7800-8000 as a stop.  

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