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:
EUR/USD:
Charts Created using Marketscope – Prepared by Kristian Kerr
–EUR/USD remains strong since changing trend during last week’s Gann time cycle turn window
–Our bias remains higher in the exchange rate with immediate focus now on the 1.3115 38% retracement of the year-to-date range
-Strength above this resistance needed to expose key levels at 1.3145 and 1.3195
-Near-term focused time cycle analysis suggests Wednesday is a minor turn window, but a Pi cycle turn window related to the 2012 low could overshadow towards the end of the week (See Focus Chart)
-The 2nd square root progression from last week’s low at 1.2970 is now key support and only weakness below this level undermines the positive technical tone in the euro
Strategy: Working an order to buy the euro near 1.2970 with a tight stop just under 1.2940.
AUD/USD:
Charts Created using Marketscope – Prepared by Kristian Kerr
–AUD/USD found support at the start of the week near the 1.0350 38% retracement of the March advance
-Subsequent strength back over the 1.0440 2×1 Gann angle line from the March closing high has shifted our bias to higher in the Aussie
-Convergence of the 78.6% retracement of the year-to-date range and the 3×1 Gann line from the year’s closing high near 1.0500 remains a key pivot with strength above needed to trigger a more important move higher
-Short-term picture is muddled from cycle standpoint but next few days should bring some clarity
-The 1.0440 level is now immediate support, however, only weakness below the 50% retracement of the past 5 trading days in the 1.0420 area turns us negative
Strategy: There is a reason there is no such thing as a “quadruple top” in technical analysis. Looking to buy Aussie on a break of 1.0505. Stop just under 1.0470
USD/CAD:
Charts Created using Marketscope – Prepared by Kristian Kerr
–USD/CAD has come under pressure over the past couple of days since finding resistance near the 1×1 Gann line of the year-to-date high on Friday
–While over the 1.0120/40 Fibonacci/Gann confluence zone our bias remains higher in Funds
-Over the 1×1 Gann line now near 1.0205 needed to confirm the start of a more important move higher
-Near-term focused time cycle analysis is unclear, but seems to favor strength over next couple of days
-Weakness under 1.0120 will turn us negative on the dollar
Strategy: Long USD/CAD from 1.0170. Stop remains at 1.0120. A little sceptical of the trade given other developments in the commodity bloc.
Focus Chart of the Day: EUR/USD
We have been saying that April would be important for the euro from a cycle perspective and even though we are only a few days into the new month it certainly seems to be living up to the billing. Thursday’s 1.2743 low in the single currency came at the very beginning of the anticipated Gann cycle turn window related to the February high. The next turn window of note is at the end of this week as the exchange rate will be one 8.6 month Pi cycle from last year’s late July low. With the pair rallying aggressively there is scope that this timeframe will mark a top of some sort, but with so many turn windows clustered close together this month there is a very good chance we will just get more volatility. The latter part of the month, however, remains the key focus turn window as it is the 61.8% time retracement of the all-time low to the all-time high. Continued strength into this timeframe will have us looking for a top.
— Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
To contact Kristian, e-mail kkerr@fxcm.com. Follow me on Twitter @KKerrFX
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