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Weekly Price & Time: Bigger USD Move Ahead?

By , Sr. Currency Strategist
10 May 2013 17:29 GMT

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.

Foreign Exchange Price & Time at a Glance:

EUR/USD Weekly:

weekly_pt_bigger_usd_move_body_Picture_3.png, Weekly Price & Time: Bigger USD Move Ahead?

Charts Created using Marketscope – Prepared by Kristian Kerr

-EUR/USD closed at its lowest level in a month and below the 2nd square root progression of last month’s high in the 1.3020 area

-A top of some sort now looks to be in place on the weekly that suggests the broader downtrend in place since February is likely to try to re-assert

-Focus over the next week will be on the 3rd square root progression of the April high near 1.2900 with weakness below this level needed to confirm the integrity of the current decline

-Medium-term time cycle studies now look negative on the rate for at least several more weeks if not longer

-Only strength above the 4th square root progression of the year-to-date high at 1.3245 would turn us positive on the Euro

Strategy: We like tactical short positions in the Euro against 1.3245

USD/JPY Weekly:

weekly_pt_bigger_usd_move_body_Picture_2.png, Weekly Price & Time: Bigger USD Move Ahead?

Charts Created using Marketscope – Prepared by Kristian Kerr

-USD/JPY finally overcame the 100 psychological barrier this week and traded to its highest level since October of 2008

-Our weekly bias is higher in the exchange rate with focus on a square root progression related to the March low in the 102.45 area

-Weekly close above the two key time cycle turn dates recorded last month favors general strength in the rate for several more weeks

-The 50% retracement of the 2007 to 2011 decline in the 99.80 area is now key support

-Only a weekly close below this level undermines the positive medium-term technical structure in the rate

Strategy: We like holding tactical long positions in USD/JPY whilst above 99.80.

GBP/USD Weekly:

weekly_pt_bigger_usd_move_body_Picture_1.png, Weekly Price & Time: Bigger USD Move Ahead?

Charts Created using Marketscope – Prepared by Kristian Kerr

-GBP/USD failed again this week to surpass the 50% retracement of the year-to-date range in the 1.5585 area

-Subsequent weakness from this level to test the 2nd square root progression of last week’s high in the 1.5325 area has us looking for a broader downside resumption

-A close below this level in the next week or two is needed to confirm this suspected change in medium-term trend

-A longer-term Gann related time cycle turn window is in effect which further favors a trend shift here

-The 1.5585 level remains key resistance and only a weekly close over this level turns us positive on Cable.

Strategy: Tactical short positions favored in Cable whilst below 1.5585.

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

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10 May 2013 17:29 GMT