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Price & Time: Top Looming in the Aussie

By , Sr. Currency Strategist
16 April 2014 12:00 GMT

Talking Points

  • Important cyclical relationship coming up for AUD/USD
  • USD/JPY rebounds from major Gann level
  • GBP/USD at important cyclical inflection point

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Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: USD/JPY

PT_APR_16_body_Picture_3.png, Price & Time: Top Looming in the Aussie

Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/JPY found support again last week at the 4th square root relationship of the year’s high in the 101.35 area
  • Our near-term trend bias is negative in the exchange rate while below 103.00
  • A move under 101.35 is needed to trigger a more important decline
  • A potentially important cycle turn window is eyed around the end of the week
  • Only strength over 103.00 turns us positve on the dollar again

USD/JPY Strategy: Like the short side while below 103.00

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

USD/JPY

100.75

*101.35

102.25

102.75

*103.00

Price & Time Analysis: GBP/USD

PT_APR_16_body_Picture_2.png, Price & Time: Top Looming in the Aussie

Charts Created using Marketscope – Prepared by Kristian Kerr

  • GBP/USD is once again threatening the year’s high near 1.6820
  • Our near-term trend bias is higher in Cable while over 1.6655
  • A breach of both 1.6820 and a key square root relationship of last year’s low at 1.6850 is needed to prime the market for a new leg higher
  • However, a cycle turn window of some importance is seen today
  • A move under 1.6655 will turn us negative on the Pound

GBP/USD Strategy: Hold only small longs into this turn window.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

GBP/USD

*1.6655

1.6725

1.6790

1.6820

*1.6855

Focus Chart of the Day: AUD/USD

PT_APR_16_body_Picture_1.png, Price & Time: Top Looming in the Aussie

A simple Fibonacci time extension suggests the next couple of weeks could prove critical for AUD/USD. The 200% extension of the move measured from the 2008 low to the 2011 high could influence during this time. The 161.8% time extension of the same advance led to last year’s high. Will history repeat in 2014? Probably not, but with the exchange rate trending higher into this important turn window the odds seem to favor a top of at least some importance developing. The 8th square root relationship of the year’s low at .9460 and the 78.6% retracement of the October to January decline at .9520 look to be very important resistance.

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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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16 April 2014 12:00 GMT