Talking Points
- USD/JPY setting for an important move
- NZD/USD entering into important cycle turn window
- Watching the weekly in AUD/USD
Unfamiliar with Gann Square Root Relationships? Learn more about them here.
Foreign Exchange Price Time at a Glance:
Price Time Analysis: USD/JPY
Charts Created using Marketscope – Prepared by Kristian Kerr
- USD/JPY remains in consolidation mode below the 2nd square root relationship of the year’s low at 102.75
- Our near-term trend bias is higher in the exchange rate while above 101.35
- A daily close over 102.75 is needed to set off a more important advance
- A minor cycle turn window is seen early next week
- A daily close below 101.35 will turn us negative on USD/JPY
USD/JPY Strategy: Square in this range. Break of 102.75 or 101.35 will force us in.
Price Time Analysis: NZD/USD
Charts Created using Marketscope – Prepared by Kristian Kerr
- NZD/USD probed above the 4th square root relationship of the year’s low at .8405 today to trade at its highest level since mid-January
- Our near-term trend bias is positive on the Bird while above .8360
- The year’s high and the 78.6% retracement of the Oct/Feb decline between .8430/40 is important resistance
- An important cycle turn window is seen over the next few days
- A daily close under .8360 will turn us negative on the Kiwi
NZD/USD Strategy: Like the long side while over .8360, but positions should be reduced into this turn window. Will look to cover and go short on a move through .8360.
Focus Chart of the Day: AUD/USD
Two key “Pi cycle” relationships related to the 2011 high and 2001 low in AUD/USD converged this week. We have purposely neglected to mention them until now because we are unsure what they mean for the exchange rate and were hoping to get more clarity by observing the daily price action. It still remains unclear. We do suspect that following such a clear convergence of major cyclical relationships that this time period will ultimately prove to be a very important inflection point for the Aussie. However, we now have to defer to the weekly charts for directional clarity. This week’s low of .8900 and last week’s high of .9080 are key pivots. A clear break of this week’s low will confirm that an important top is in place and set the stage for a resumption of the broader decline. Conversely, a move back through .9080 would confirm that a low of importance has been recorded in AUD/USD. A Pi cycle relationship related to the 2011 high in NZD/USD hits early next week. Perhaps the Aussie is waiting for its Antipodean cousin to show the way?
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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