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Price & Time: Critical Couple of Days Coming Up For JPY, AUD & CAD

Price & Time: Critical Couple of Days Coming Up For JPY, AUD & CAD

2013-05-31 12:04:00
Kristian Kerr, Sr. Currency Strategist
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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 receive other reports from this author via e-mail, sign up to Kristian’s e-mail distribution list via this link.

Foreign Exchange Price & Time at a Glance:

USD/JPY:

PT_AUDCADJPY_body_Picture_4.png, Price & Time: Critical Couple of Days Coming Up For JPY, AUD & CAD

Charts Created using Marketscope – Prepared by Kristian Kerr

-USD/JPY has continued to slide over the past few days and touched its lowest level in more than three weeks on Friday

-While below the 2nd square root progression of the year-to-date high at 101.70 our bias is lower in the exchange rate

-The 50% retracement of the May range in the 100.35 area is a key near-term pivot with weakness below needed to expose critical Gann support at 99.60/90

-Next few days are extremely important for the pair from a time cycle perspective as a Pi cycle relationship with the September low should influence

-Traction over 101.70 would signal an upside resumption and shift our bias higher

Strategy: Watching to see how the rate reacts in the cyclical turn window over the next few days before positioning aggressively. Chances of a low are increasing.

AUD/USD:

PT_AUDCADJPY_body_Picture_3.png, Price & Time: Critical Couple of Days Coming Up For JPY, AUD & CAD

Charts Created using Marketscope – Prepared by Kristian Kerr

-AUD/USD continues to meander along the 1x2 Gann angle line of the year-to-date closing high

-While below a key confluence of Gann and Fibonacci levels in the .9790 to .9810 area our bias has to remain lower

-However, with the rate entering a potentially important cyclical turn window related to the January and April peaks early next week the Aussie is more vulnerable to a reversal

-The 50% retracement of the 2010 to 2011 advance and the 10th square root progression of the year-to-date high in the .9570/40 area is an important support with a close below required to maintain the downside tack

-A clear break of .9810 is needed to signal the start of a more significant upside correction

Strategy: Like covering remaining short postions here and re-positioning in a few days after the turn window.

GOLD:

PT_AUDCADJPY_body_Picture_2.png, Price & Time: Critical Couple of Days Coming Up For JPY, AUD & CAD

Charts Created using Marketscope – Prepared by Kristian Kerr

-XAU/USD finally managed to close above the 1395 2nd square root progression of the year-to-date low on Thursday

-Our bias is now higher in the metal with focus on the 3rd square root progression at 1433

-Traction over this level is required to setup a bigger push towards 1460 and above

-The medium-term cycles turned positive a couple of weeks ago, but a bigger picture cyclical inflection point is seen in the second half of June

-The 1395 level is now immediate support, but only weakness below the 1st square root progression of the year-to-date low at 1358 turns us negative on the metal

Strategy: Long positions favored here in Gold against 1358.

Focus Chart of the Day: CAD/JPY

PT_AUDCADJPY_body_Picture_1.png, Price & Time: Critical Couple of Days Coming Up For JPY, AUD & CAD

The Yen has thrown us a curve ball (or googlie depending on what part of the world you live) as we enter this important cyclical turn window over the next few days. What initially looked like a clear potential top in USD/JPY could now just as easily be a low with the persistent weakness being exhibited in the pair over the past week. In fact, the price action of the past few days is eerily reminiscent of the action seen just ahead of the last cyclical turn widow of importance in early May. With time cycles also suggesting heightened potential for turns in the AUD/USD and USD/CAD it seems natural to look at the crossrates of AUD/JPY and CAD/JPY for further clues. While only CAD/JPY is shown above, both have been in pretty clear downtrends over the past few weeks and are prone to turn during this window. In CAD/JPY key support zones look to be 96.05/25 and 94.65/95. A test and hold of these levels over the next few days will set up a compelling long side trading opportunity from a price & time perspective. More to come as/if it unfolds.

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

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

To contact Kristian, e-mail instructor@dailyfx.com. Follow me on Twitter @KKerrFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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