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Price & Time: Gold Breaks Key Support Levels

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This publication attempts to further explore the concept that mass movements of human psychology, as represented by the financial markets, are subject to the mathematical laws of nature and through the use of various geometric, arithmetic, statistical and cyclical techniques a better understanding of markets and their corresponding movements can be achieved.

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Foreign Exchange Price Time at a Glance:

USD/CHF:

PT_gold_body_Picture_4.png, Price amp; Time: Gold Breaks Key Support Levels - Now What?

Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/CHF has traded steadily higher since finding support the week before last at the 7th square root progression of the year-to-date high
  • Our trend bias is now higher in the exchange rate with focus on the 3rd square root progression of the month-to-date low at .9415
  • A close above this level will be further confirmation of a broader developing up trend in the rate
  • Near-term focused cycles indicate the latter part of the week will be a minor turn window
  • The 2ns square root progression of this month’s low at .9320 is immediate support, but only weakness below .9240 turns us negative

Strategy: Long positions favored while over .9240

NZD/USD:

PT_gold_body_Picture_3.png, Price amp; Time: Gold Breaks Key Support Levels - Now What?

Charts Created using Marketscope – Prepared by Kristian Kerr

  • NZD/USD continues to meander around the 10th square root progression of the year-to-date high in the .7755 area
  • Our trend bias remains lower in Kiwi, but caution is required as the rate nears key long-term retracements below .7700
  • Cycles studies are a bit muddled, but a minor turn window is seen early next week
  • Immediate resistance is seen at .7805
  • However, only strength over the 2nd square root progession of this week’s low around .7860 would suggest a more important shift in trend

Strategy: Flat around these longer-term support levels. May look to go long over .7860.

GBP/USD:

PT_gold_body_Picture_2.png, Price amp; Time: Gold Breaks Key Support Levels - Now What?

Charts Created using Marketscope – Prepared by Kristian Kerr

  • GBP/USD has come under steady downside pressure since failing last week at the 1×1 Gann angle line of the year-to-date high
  • Our trend bias remains lower in Cable with with immediate focus on the 50% retracement of the February to March decline at 1.5355
  • A close below this level is required to set up further weakness towards 1.5290 and below
  • Cycles studies are broadly negative on the rate into the middle of next month
  • The 2nd square root progression of the month-to-date high 1.5500 is immediate resistance, but only back over 1.5630 turns the technical outlook positive

Strategy: Like holding short positons in Cable while below 1.5630.

Focus Chart of the Day: GOLD

PT_gold_body_Picture_1.png, Price amp; Time: Gold Breaks Key Support Levels - Now What?

The sharp decline in Gold on Wednesday is a great example of what can happen when key time and price supports are broken just after a cycle turn window. Last week we wrote about the potential for a turn in the metal between June 20-25. The decline did stall during this time period around 1270, but was unable to gain any upside traction back above our key pivot at the 1301 50% retracement of the 2008 to 2011 advance. As we have noted in the past, a failure to show much reaction at a turn window is often a key development seen ahead of an acceleration in the direction of the primary trend. This looks to be precisely what we got today on the break of Monday’s “cycle low”. This obviously puts the metal in a precarious cyclical position, but with DSI and other sentiment metrics showing extreme negative readings we are still very wary of a potentially violent snapback when this current decline runs its course. Immediate downside Gann levels to watch over the next couple of days are 1220 and 1207.

Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

Looking for a way to pinpoint sentiment extremes in GOLD in real time? Try the Speculative Sentiment Index.

To contact Kristian, e-mail kkerr@fxcm.com. Follow me on Twitter @KKerrFX

Analys från DailyFX

EURUSD Weekly Technical Analysis: New Month, More Weakness

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What’s inside:

  • EURUSD broke the ‘neckline’ of a bearish ‘head-and-shoulders’ pattern, April trend-line
  • Resistance in vicinity of 11825/80 likely to keep a lid on further strength
  • Targeting the low to mid-11600s with more selling

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Coming into last week we pointed out the likelihood of finally seeing a resolution of the range EURUSD had been stuck in for the past few weeks, and one of the outcomes we made note of as a possibility was for the triggering of a ’head-and-shoulders’ pattern. Indeed, we saw a break of the ’neckline’ along with a drop below the April trend-line. This led to decent selling before a minor bounce took shape during the latter part of last week.

Looking ahead to next week the euro is set up for further losses as the path of least resistance has turned lower. Looking to a capper on any further strength there is resistance in the 11825-11880 area (old support becomes new resistance). As long as the euro stays below this area a downward bias will remain firmly intact.

Looking lower towards support eyes will be on the August low at 11662 and the 2016 high of 11616, of which the latter just happens to align almost precisely with the measured move target of the ‘head-and-shoulders’ pattern (determined by subtracting the height of the pattern from the neckline).

Bottom line: Shorts look set to have the upperhand as a fresh month gets underway as long as the euro remains capped by resistance. On weakness, we’ll be watching how the euro responds to a drop into support levels.

For a longer-term outlook on EURUSD, check out the just released Q4 Forecast.

EURUSD: Daily

EURUSD Weekly Technical Analysis: New Month, More Weakness

—Written by Paul Robinson, Market Analyst

You can receive Paul’s analysis directly via email bysigning up here.

You can follow Paul on Twitter at@PaulRobinonFX.

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Euro Bias Mixed Heading into October, Q4’17

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Euro Bias Mixed Heading into October, Q4'17

Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.

EURUSD: Retail trader data shows 37.3% of traders are net-long with the ratio of traders short to long at 1.68 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.07831; price has moved 9.6% higher since then. The number of traders net-long is 15.4% lower than yesterday and 16.4% higher from last week, while the number of traders net-short is 0.4% higher than yesterday and 10.5% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Positioning is more net-short than yesterday but less net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EURUSD trading bias.

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

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British Pound Reversal Potential Persists Heading into New Quarter

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British Pound Reversal Potential Persists Heading into New Quarter

Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.

GBPUSD: Retail trader data shows 38.2% of traders are net-long with the ratio of traders short to long at 1.62 to 1. In fact, traders have remained net-short since Sep 05 when GBPUSD traded near 1.29615; price has moved 3.4% higher since then. The number of traders net-long is 0.1% higher than yesterday and 13.4% higher from last week, while the number of traders net-short is 10.6% lower than yesterday and 18.3% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse lower despite the fact traders remain net-short.

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form

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