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:
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:
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:
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
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
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