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Price & Time: Gold Breaks Key Support Zone

By , Sr. Currency Strategist
13 September 2013 12:00 GMT
  • Gold falls below important near-term support
  • USD/JPY struggles with Gann resistance
  • GBP/USD nearing a critical resistance area

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Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: USD/JPY

PT_Gold_breaks_body_Picture_4.png, Price & Time: Gold Breaks Key Support Zone

Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/JPY failed earlier this week just shy of the 100.65 3rd square root progression of the year’s high
  • Our near-term trend bias remains higher, however, while above the 50% retracement of the May to August decline at 98.75
  • The 100.65 area is now a key upside pivot with traction above this zone needed to force a more serious move higher
  • Early next week is a minor cycle turn window
  • Weakness below 98.75 on a closing basis would undermine the immediate positive tone in the rate and turn us negative

USD/JPY Strategy: Like the long side while above 98.75.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

USD/JPY

98.10

*98.75

99.65

100.05

*100.65

Price & Time Analysis: GBP/USD

PT_Gold_breaks_body_Picture_3.png, Price & Time: Gold Breaks Key Support Zone

Charts Created using Marketscope – Prepared by Kristian Kerr

  • GBP/USD traded to a new 7-month high yesterday before encountering resistance at the 4th square root progression of the year-to-date high in the 1.5835 area
  • While over 1.5710 our near-term trend bias will remain higher in Cable
  • The 1.5835 area is a near-term upside pivot, but strength over 1.5885/95 is really needed to prompt the next important leg higher
  • An medium-term cycle turn window is in effect over the next few days
  • The 1x4 Gann angle line of the year’s low at 1.5755 is immediate support, but only weakness below 1.5710 would sour the positive near-term technical tone

GBP/USD Strategy: Like the long side while over 1.5710.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

GBP/USD

*1.5710

1.5755

1.5810

1.5835

*1.5895

Price & Time Analysis: S&P 500

PT_Gold_breaks_body_Picture_2.png, Price & Time: Gold Breaks Key Support Zone

Charts Created using Marketscope – Prepared by Kristian Kerr

  • S&P 500 tested the 78.6% retracement of the August range near 1692 on Thursday, but so far has been unable to overcome the resistance
  • While below this level on a closing basis our near-term trend bias will remain lower in the index
  • The 50% retracement of the August range at 1667 is immediate downside support, but clear weakness under 1627 is required to signal the start of a more serious distribution phase
  • A cycle turn window is currently in effect
  • A close over 1692 in the days ahead is needed to improve the techncial outook and turn us positve on the SPX

S&P 500 Strategy: Like holding small short positions against 1692.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

S&P 500

*1627

1668

1685

*1692

*1710

Focus Chart of the Day: GOLD

PT_Gold_breaks_body_Picture_1.png, Price & Time: Gold Breaks Key Support Zone

XAU/USD smashed through an important zone at 1337/50 on Thursday. While over 1270 our broader bias is still positive on the yellow metal, but the sharp decline of the past couple of days raises the possibility of a more messy two-way corrective process. The next important cyclical turn window in the metal looks to be around late next week and the start of the week of September 23rd. Any weakness below 1270 over the next few days would undermine most of the positive technical developments of the past few months and turn us negative. A daily close back over 1350 is needed signal an early upside resumption.

--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

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

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

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13 September 2013 12:00 GMT