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Price & Time: Gold at a Crossroads

By , Sr. Currency Strategist
31 January 2014 13:40 GMT

Talking Points

  • EUR/USD threatening important break
  • Gold enters into important cycle turn window

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Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: EUR/USD

PT_JAN_31_body_Picture_2.png, Price & Time: Gold at a Crossroads

Charts Created using Marketscope – Prepared by Kristian Kerr

  • EUR/USD has come under steady pressure over the past few days following repeated failures at a key Gann angle line earlier in the week
  • Our near-term trend bias is lower in the exchange rate while below 1.3705
  • The 3rd square root relationship of the 2013 high at 1.3540 remains a key near-term pivot with weakness below needed to signal the start of a more important decline
  • A minor cycle turn window is seen later next week
  • Only a close over the 50% retracement of the December to January range in the Euro at 1.3705 would turn us positive

EUR/USD Strategy: We like the short side while below 1.3705

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

EUR/USD

1.3485

*1.3540

1.3550

1.3655

*1.3705

Focus Chart of the Day: GOLD

PT_JAN_31_body_Picture_1.png, Price & Time: Gold at a Crossroads

The next couple of trading days should be significant for Gold from a short-term cyclical perspective. On Monday we warned that the remainder of the week would likely see general weakness in XAU/USD. The metal has come steady pressure since then, but key support levels have not really been challenged. If the advance from the low on December 31st has been more than just a correction within a primary downtrend then the metal should try to turn up over the next few days and re-challenge key resistance between 1276 and 1292. A move through the latter would give strong evidence that the trend has indeed changed. Any weakness below the 50% retracement of the December/January range near 1229 would severely undermine the potential positive cyclicality.

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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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31 January 2014 13:40 GMT