Talking Points
- EUR/USD nearing important cycle turn window
- USD/JPY smashes through important resistance
- AUD/USD rebounds off key support zone
Looking for real time Forex analysis throughout the day? Try DailyFX on Demand.
Foreign Exchange Price Time at a Glance:
Price Time Analysis: USD/JPY
Charts Created using Marketscope – Prepared by Kristian Kerr
- USD/JPY probed above the 1st square root progression of the year’s high at 102.75 to reach its highest level since late May on Monday
- Our near-term trend bias is positive on the exchange rate while over 100.65
- The 161.8% extension of the September/October decline at 103.05 is the next level of resistance ahead of the year’s high
- A medium-term cycle turn window is seen next week
- Only a daily close below the 2nd square root progression of the year’s high at 100.65 would undermine the immediate positive tone in the rate
USD/JPY Strategy: Focus on long side opportunities while over 100.65.
Price Time Analysis: AUD/USD
Charts Created using Marketscope – Prepared by Kristian Kerr
- AUD/USD fell to its lowest levels since early September on Friday before rebounding from strong support at the 7th square root relationship of the October high
- Our near-term trend bias is lower in the Aussie while below .9170
- A convergence of several important Fibonacci and Gann levels between .9060 and .9030 suggest it is an extremely important support zone and a daily close below is needed to confirm a resumption of the broader decline
- A medium-term cycle turn window is seen next week
- Only a daily close over .9170 will shift our near-term trend bias to positive in the Aussie
AUD/USD Strategy: We like being flat following the rebound from key support.
Focus Chart of the Day: EUR/USD
The next week or so looks to be quite important for the Euro from a cyclical perspective. Starting around Wednesday and extending to next Tuesday a myriad of different cyclical methodologies all begin to converge. Perhaps the most important is a Fibonacci time relationship with last year’s low and the 1Q13 high at the end of the week. With EUR/USD having rallied steadily for over three weeks now a secondary high (versus the October high) of some kind forming during this turn window is clearly the favored scenario. Only aggressive weakness on a daily close basis over the next few days below 1.3430 would warn that the Euro has peaked ahead of schedule. Such aggressive weakness could also raise the possibility of a cyclical inversion (low instead of a high). Both look like relatively low probability scenarios at the moment.
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
To contact Kristian, e-mail kkerr@fxcm.com. Follow me on Twitter @KKerrFX