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Weekly Price & Time: Euro Fails at Key Resistance - Now What?

By , Sr. Currency Strategist
01 November 2013 15:30 GMT

Talking Points

  • Euro reverses sharply from key resistance zone
  • USD/JPY close to breaking out of multi-month consolidation
  • Gold nearing important support zone

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Weekly Foreign Exchange Price & Time at a Glance:

Weekly Price & Time Analysis: EUR/USD

WPT_NOV1_body_Picture_3.png, Weekly Price & Time: Euro Fails at Key Resistance - Now What?

Charts Created using Marketscope – Prepared by Kristian Kerr

  • EUR/USD has come under aggressive downside pressure since failing last week at the 61.8% retracement of the 2011 to 2012 decline in the 1.3830 area
  • A weekly close below the 2nd square root progression of the year’s high near 1.3595 will turn the broader downtrend to negative
  • The 3rd square root progression of the year’s high at 1.3475 is a near-term downside pivot with weakness below needed to expose the 61.8% retracement of the September to October advance at 1.3380
  • The middle of November and the first half of December look significant for the Euro from a longer-term cyclical perspective
  • Back through 1.3715 needed to turn attention higher

Weekly EUR/USD Strategy: Now looking to sell the Euro into strength.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

EUR/USD

*1.3380

1.3475

1.3495

*1.3595

*1.3715

Weekly Price & Time Analysis: USD/JPY

WPT_NOV1_body_Picture_2.png, Weekly Price & Time: Euro Fails at Key Resistance - Now What?

Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/JPY remains near the middle of a multi-month contracting range
  • A weekly close over 98.60 will shift our broader bias to positive in the exchange rate
  • However, a move through the 61.8% retracement of the late September to early October decline near 99.00 is really needed to increase confidence that a break of the range is underway
  • A fibonaci time relationship suggests a move out of the range is more likely here
  • Weakness below 96.55 would re-invigorate downside prospects and pave the way for a decline over the remainder of the quarter

Weekly USD/JPY Strategy: Square here, but will buy a weekly close over 98.60.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

USD/JPY

*96.55

97.60

98.75

*99.00

99.60

Weekly Price & Time Analysis: GOLD

WPT_NOV1_body_Picture_1.png, Weekly Price & Time: Euro Fails at Key Resistance - Now What?

Charts Created using Marketscope – Prepared by Kristian Kerr

  • XAU/USD has come under steady pressure the past few days following last week’s failure near the 61.8% retracement of the August to October decline in the 1364 area
  • Our broader trend bias is positive in the metal while above the 1x1 Gann angle line of the year’s closing low near 1275
  • The 1364 level remains a clear upside hurdle and traction above is needed to signal a resumption of the uptrend
  • A potentially important cycle turn window is seen next week
  • Only a move below 1275 on a weekly closing basis would turn us negative on the metal

Weekly XAU/USD Strategy: Like buying into weakness over the next few days against 1275.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

XAU/USD

*1275

1300

1307

1322

*1364

--- 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

Looking for a way to pinpoint sentiment extremes 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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01 November 2013 15:30 GMT