Tanalys

Price & Time: Too Much "Hope" in USD/JPY?

Talking Points

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Foreign Exchange Price Time at a Glance:

Price Time Analysis: EUR/USD

Charts Created using Marketscope – Prepared by Kristian Kerr

EUR/USD Strategy: Like the long side while 1.3730 holds.

Price Time Analysis: GOLD

Charts Created using Marketscope – Prepared by Kristian Kerr

XAU/USD Strategy: Square here, may look to go long on a move through 1306.

Focus Chart of the Day: USD/JPY

USD/JPY found support at the beginning of the month near the 4th square root relationship of the year’s high in the 101.35 area. The recovery that has followed has been steady but has made little real upside progress as the exchange rate remains in the middle of its 3-month range. Interestingly despite this lack of progress on the upside, sentiment towards the Yen has fallen dramatically with the Daily Sentiment Index (DSI) touching just 13% bulls on Monday. Usually such extremes in sentiment are witnessed after powerful trends not minor recoveries like we have seen in USD/JPY over the past few weeks. Such conviction suggests to us that USD/JPY is vulnerable to a downside break in May. The first half of next week looks significant from a cyclical perspective and a high in USD/JPY is favored around this time.

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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

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