Talking Points
- EUR/USD closing in on 50-day moving average
- USD/JPY consolidates below minor retracement level
- NZD/USD range trading above multi-year low
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Foreign Exchange Price Time at a Glance:
Price Time Analysis: USD/JPY
ChartPrepared by Kristian Kerr
- USD/JPYcontinues to consolidate below a minor retracement level at 125.20
- Our near-term trend bias is higher in the exchange rate while above 124.00
- A daily close above 125.20 is needed to set off the next leg higher in the exchange rate
- A very minor turn window is eyed tomorrow
- A daily close below 124.00 would turn us negative on USD/JPY
USD/JPY Strategy: Like the long side while above 124.00
Price Time Analysis: NZD/USD
ChartPrepared by Kristian Kerr
- NZD/USD continues to consolidate above .6500
- Our near-term trend bias is negative on the kiwi while below .6735
- A move under .6500 is needed to set up a test of a key long-term retracement around .6400
- A very minor turn window is eyed tomorrow
- A daily close above the .6735 would turn us positive on the bird
NZD/USD Strategy: Like the short side while below .6735
Focus Chart of the Day: EUR/USD
The big news overnight in the FX markets was the decision by the PBoC to devalue the CNY. This not surprisingly prompted a fairly immediate dollar rally across the board. USD strength was short-lived in the case of EUR/USD, however, as the pair made back all its PBoC inspired losses by the beginning of European trading (purportedly on the back of a large unwind of short EUR/CNH positions). The loss of downside momentum in EUR/USD over the past few days in the face of some fairly positive USD news clearly raises the risk for a deeper upside correction in the pair. The 50-day moving average around 1.1100 remains critical in this regard as it has so successfully repelled rally attempts over the past month. Any traction above this level would be a pretty clear bullish change in behavior. Failure around this level followed by a break of 1.0950 likely paves the way for a renewed assault on the critical downside pivot at 1.0800.
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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