Talking Points

• Anniversary day high in the Euro
• USD/CHF encounters important resistance
• USD/CAD holds key support level

Join me at 15:00 GMT for my weekly outlook on the FX markets using Gann, Cycles other methods of market geometry. It can be viewedhere.

Focus Chart of the Day: EUR/USD

Just how important is last month’s high in EUR/USD? As we have made mention in the past, anniversary dates of important turning points often lead to reversals. Our colleague Jamie Saettele pointed out last week that the October 25th 1.3831 high roughly coincided with the anniversary of the all-time low in the Euro recorded on October 26, 2000 (Read here). The reaction from this most recent late October “turn window” has certainly been impressive with the exchange rate losing more than 3 big figures thus far. It is still too early to tell if this latest peak will prove significant in the longer-term and the reaction of the exchange rate at the next important cyclical turn window around the middle of the month will be the first good indication of what is really going on.

Foreign Exchange Price Time at a Glance:

Price Time Analysis: USD/JPY

Charts Created using Marketscope – Prepared by Kristian Kerr

• USD/JPY continues to lack any real direction as the rate remains glued to the middle of a multi-month contracting range
• Our near-term trend positive on the rate while above 96.60
• The 2×1 Gann angle line of the year’s high near 99.00 looks to be an important upside pivot with traction above needed to signal the start of a more meaningful move higher
• A very minor cycle turn window is seen today
• A decline below the 7th square root progression of the year’s high near 96.60 would shift our trend bias lower

USD/JPY Strategy: Like the long side while over 96.65

Price Time Analysis: USD/CHF

Charts Created using Marketscope – Prepared by Kristian Kerr

• USD/CHF trraded to its highest level since mid-October yesterday before encountering resistance near the 2×1 Gann angle line of the 2012 high in the .9145 area
• Our near-term trend bias is higher in the exchange rate while above .9030
• The .9145 area is near-term resistance but traction over the 50% retracement of the September to October decline near .9175 is really needed to confirm the start of another meaningful move higher
• Minor cycle turn windows are seen today and near the end of the week
• A close back under the 50% retracement of the late October decline at .9030 will shift the near-term trend bias to negative

USD/CHF Strategy: Like the long side over .9030.

Price Time Analysis: USD/CAD

Charts Created using Marketscope – Prepared by Kristian Kerr

• USD/CAD reversed last week from a medium-term cycle turn window
• However, weakness so far has been unimpressive and our near-term trend bias is still higher
• The 3rd square root progression of the September low near 1.0485 is an important near-term upside pivot with strength above needed to prompt a more important move higher
• The middle of the week is a minor cycle turn window
• A decline below the 50% retracement of the August to September decline near 1.0370 would turn us negative on Funds

USD/CAD Strategy: Like only a reduced long position while above 1.0370.

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

— 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

Looking for a way to pinpoint sentiment extremes in real time? Try the Speculative Sentiment Index.

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