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Price & Time: Keeping a Close Eye on the Equity Market Here

Price & Time: Keeping a Close Eye on the Equity Market Here

Kristian Kerr, Sr. Currency Strategist

USD/JPY & USD/CHF break key pivots while USD/CAD flirts with a major level on the downside. S&P 500 in the midst of a topping process.

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:

Price & Time Analysis: USD/JPY

PT_stocks_body_Picture_4.png, Price & Time: Keeping a Close Eye on the Equity Market Here

Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/JPY continues to move higher following last week’s rebound off the 1x1 Gann angle line of the February low
  • Strength on Tuesday through the 97.60 Fibonacci confluence zone has shifted the near-term trend bias to positive
  • The 5th square root progression of the year’s high near 98.60 is a near-term pivot with strength above needed to spur the next leg higher
  • Near-term focused cycles suggest the end of the week is a minor turn window
  • The 97.60 area is now immediate support, but only weakness below 96.55 on a closing basis turns the outlook negative

USD/JPY Strategy: Like the long side while over 96.55.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

USD/JPY

*96.55

97.60

98.20

*98.60

99.00

Price & Time Analysis: USD/CHF

PT_stocks_body_Picture_3.png, Price & Time: Keeping a Close Eye on the Equity Market Here

Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/CHF found support last week on a closing basis at the 88.6% retracement June to July advance
  • Subsequent strength back through .9300 has shifted the near-term trend back to positive in the exchange rate
  • The 2nd square root progression of last week’s low at .9360 is key level with a close above is needed to confirm the start of a more important upside move
  • A minor turn window is seen around the end of the week
  • The .9300 area is interim support, but only weakness below .9240 on a closing basis would shift the outlook back to negative.

USD/CHF Strategy: Like the long side in USD/CHF while over .9240.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

USD/CHF

*0.9240

0.9305

0.9360

*0.9360

0.9405

Price & Time Analysis: USD/CAD

PT_stocks_body_Picture_2.png, Price & Time: Keeping a Close Eye on the Equity Market Here

Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/CAD failed at a key Fibonacci confluence in the 1.0440 area last week
  • Subsequent weakness below 1.0345 has shifted the near-term trend bias to negative in Funds
  • The 2x1 Gann angle line of the 2012 low at 1.0270 looks like key support and weakness below this level is really required to signal the start of a more significant decline
  • Medium-term cycles studies, however, look positive into the middle of next week
  • Over 1.0380 relieves some downside pressure, but a move through 1.0440 on a closing basis is really needed to turn the technical structure positive

USD/CAD Strategy: Don’t like being short against the positive cyclicality while above 1.0270.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

USD/CAD

*1.0270

1.0315

1.0340

1.0380

*1.0440

Focus Chart of the Day: S&P 500

PT_stocks_body_Picture_1.png, Price & Time: Keeping a Close Eye on the Equity Market Here

The S&P 500 continues to meander between the 4th and 3rd square root progressions of the June 24th low. As we have highlighted in recent notes the first few weeks of August have long-term cyclical importance and mark a point in time where the index could undergo some sort of shift in trend. The July 26th low near 1675 has price & time significance and a breach of this level on a closing basis would be initial confirmation of a top. We cannot rule out a final spike higher to new all-time highs through the beginning of next week which is still part of a broader topping process, but sustained strength over 1710 into late next week would be strong evidence that the index has weathered the cyclical storm and is set for higher prices into the Fall. For the moment it is still wait and see.

--- 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 the SPX 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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