Talking Points
- USD/JPY stalls at key resistance zone
- Cable still struggling for direction
- NZD/USD testing important trendline
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Foreign Exchange Price Time at a Glance:
Price Time Analysis: USD/JPY
ChartPrepared by Kristian Kerr
- USD/JPYstalled near the mid-June highs earlier this week
- Our near-term trend bias is higher in the exchange rate while above 1.2300
- A daily close above the 78.6% retracement of the June – July decline at 124.70 is needed to re-instill upside momentum into the rate
- A minor turn window is seen early next week
- A close under 122.00 would turn us negative on USD/JPY
USD/JPY Strategy: Like the long side while over 122.00
Price Time Analysis: GBP/USD
ChartPrepared by Kristian Kerr
- GBP/USD continues to consolidate below the 61.8% retracement of the June – July decline at 1.5700
- Our near-term trend bias is lower in cable while below 1.5700
- A move back under 1.5525 is needed to re-instill downside momentum into the exchange rate
- A very minor turn window is eyed today
- A daily close above 1.5700 would turn us positive on the pound
GBP/USD Strategy: Like the short side while below 1.5700
Focus Chart of the Day: NZD/USD
We wrote last week about the extreme negative sentiment picture developing in NZD/USD and the propensity for such conditions to lead to some fairly sharp counter-trend moves. Almost on cue after touching the 5% bulls level on the DSI the kiwi began to rally at the start of the week (helped by comments from the NZ Prime Minister – a former FX trader). Last night’s decision to “only” cut the key rate by 25 basis points (some were looking for 50bps) and a less dovish than expected accompanying statement has forced a further scramble for a wrongly positioned market. The key level to watch over the next few sessions looks to be the trendline connecting the May/June highs around .6700. A daily close or two above .6700 would warn that a deeper retracement is at hand while a clear failure here at resistance would open the way for a move to test long-term Fibonacci attraction around .6400.
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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