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Price & Time: Beware the End of March?

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Talking Points

  • Important cyclical relationships converging later this week for USD, important low developing?
  • USD/JPY closing in on key resistance
  • GBP/USD rebounds from key Fibonacci level, bigger recovery underway?

Unfamiliar with Gann Square Root Relationships? Learn more about them HERE.

Foreign Exchange Price Time at a Glance:

Price Time Analysis: USD/JPY

PT_MAR_24_body_Picture_3.png, Price amp; Time: Beware the End of March?

Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/JPY has moved modestly higher over the past few days after once again finding support near the 101.35 4th square root relationshipof the year’s high
  • Our near-term trend bias is higher in USD/JPY while above 101.35
  • The 2nd square root relationship of the year’s low at 102.75 is immediate resistance with a move above needed to re-instill upside momentum for a more important move higher
  • A cycle turn window is seen over the next day or two
  • Only aggressive weakness back under 101.35 would turn us negative on USD/JPY

USD/JPY Strategy: We like being long against 101.35.

Price Time Analysis: GBP/USD

PT_MAR_24_body_Picture_2.png, Price amp; Time: Beware the End of March?

Charts Created using Marketscope – Prepared by Kristian Kerr

  • GBP/USD has come under steady pressure following last week’s break of the 2nd square root relationship of the year’s high at 1.6560
  • Our near-term trend bias is now lower in Cable
  • Support was found earlier today at the 1.6460 161.8% extension of the late Feb/early March advance, this level needs to be broken to signal recent weakness has been more than just a minor correction
  • An important cycle turn window is seen later this week
  • A daily close back over 1.6690 would turn us positive on the Pound

GBP/USD Strategy: We like selling into strength over the next few days against 1.6690.

Focus Chart of the Day: FXCM Dollar Index

PT_MAR_24_body_Picture_1.png, Price amp; Time: Beware the End of March?

The latter part of this week has strong timing for several of the main currency pairs. As such, we will be keeping close tabs on the Dow Jones FXCM Dollar Index as it is an equal weight basket of EUR/USD, GBP/USD, USD/JPY and AUD/USD and is a good way to monitor general USD strength. A daily chart shows the index has been in a general downtrend since July of last year. Is this about to change? Cyclical analysis suggests there is a strong possibility. Last week’s bounce off 10,500 in the index looks to be the first move higher. A re-test that holds or even slightly undercuts 10,500 heading into Thursday/Friday would complete the recipe for a more important bottom in the USD during this turn window. We suppose that aggressive strength over the next few days would raise the possibility of cyclical inversion (high instead of a low) heading into the end of the week, but this looks unlikely and we will cross that bridge when/if we get there. Aggressive weakness in the index under 10,500 after Friday would completely undermine the burgeoning positive cyclical view.

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

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.

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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Analys från DailyFX

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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