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Price & Time: Japanese Fireworks

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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.

Foreign Exchange Price Time at a Glance:

USD/JPY:

PT_Japanese_fire_body_Picture_4.png, Price amp; Time: Japanese Fireworks

Charts Created using Marketscope – Prepared by Kristian Kerr

USD/JPY found support at the 2nd square root progression of the February low on Thursday before exploding higher by more than three big figures

The break of a Gann/Fibonacci confluence in the 94.15 area turned us positive on the exchange rate

-Focus now on the 6th square root progression from February low at 96.55 with a close over this level the trigger to more gains

-Medium-term cycle studies turned positive at the middle of the week, but a long-term Pi cycle turn window related to the 2011 low could influence over the next few days

-The 50% retracement of the March to February decline near 94.60 is key support and only weakness below this level turns us negative on the dollar

Strategy: Got stopped in long on the move through 94.15. Took half profit ahead of 95.00. Stop on remaining half unit is just under 95.30. Some caution warranted here as we enter a big cycle turn date over the next few days.

USD/CAD:

PT_Japanese_fire_body_Picture_3.png, Price amp; Time: Japanese Fireworks

Charts Created using Marketscope – Prepared by Kristian Kerr

USD/CAD continues to test a key Gann/Fibonacci support confluence in the 1.0120/40 area

-Our bias remains cautiously negative on Funds, but a clear break of 1.0120 is required to setup a more important decline towards 1.0090 and below

-Very short-term focused cycles are positive on the exchange rate over the next couple of days

-Convergence of several major and minor retracements between 1.0170/85 remains key resistance

-Traction over this zone needed to signal that a change in trend has been seen and turn us positive

Strategy: Flat at the moment in Funds. Want to see how the market responds to 1.0120/40 area before initiating the next operation.

USD/CHF:

PT_Japanese_fire_body_Picture_2.png, Price amp; Time: Japanese Fireworks

Charts Created using Marketscope – Prepared by Kristian Kerr

USD/CHF has come under steady but modest pressure over the past few days

While above a confluence of retracements in the .9425/40 area our bias is higher in the exchange rate

-Topside focus is on the 88.6% retracement of the late March decline in the .9540 area with strength over this level needed to signal an upside resumption

-A medium-term time cycle turn window is in effect over the next few days

-Only weakness under the 78.6% retracement of last week’s range at .9390 turns us negative on USD/CHF

Strategy: Long from .9440 with a stop just under the figure. If it goes our way we will look to take some off around .9540.

Focus Chart of the Day: EUR/USD

PT_Japanese_fire_body_Picture_1.png, Price amp; Time: Japanese Fireworks

The 1×2 Gann angle line from the year-to-date high has been a key level in EUR/USD over the past few months. As the chart above shows, the line has been strong resistance and repeatedly repelled attempts higher. Perhaps more importantly, the chart also shows that the euro has been unable to close over this line since peaking in February. With the pair entering a medium-term Gann cyclical turn window over the next few days we will be using the 1×2 line as a key pivot with strength over this level on a close basis looking like an obvious technical trigger for a turn.

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

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

Are you looking for other ways to pinpoint support and resistance levels? Take our free tutorial on using Fibonacci retracements.

Need guidance managing risk on trades? Download the free Risk Management Indicator.

To receive other reports from this author via e-mail, sign up to Kristian’s e-mail distribution list via this link.

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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

Confidence is essential to successful trading, see this new guide – ’Building Confidence in Trading’.

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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