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Price & Time: Currency Reprieve

Price & Time: Currency Reprieve

Kristian Kerr, Sr. Currency Strategist

Talking Points

  • Minor cycle turn window here in the Euro
  • Gold nearing important cyclical juncture mid-week
  • AUD/USD rebounds off important support

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Focus Chart of the Day: GOLD

PT_NOV_4_body_Picture_4.png, Price & Time: Currency Reprieve

Gold has been a difficult instrument to analyze over the past few months as it has chopped around an $80 range. However, it has responded well to several cyclical turn windows during this time. Another cycle turn window related to the 2011 and 2012 peaks is seen around the middle of this week. With the metal stuck in this multi-month range it is difficult to forecast what real impact it will have. Our best guess given the weakness exhibited in Gold over the past few sessions is for some sort of low to develop. We will be watching especially closely support levels at 1300 and 1285/75 for a positive reaction. Any weakness below 1275 on a closing basis will turn the outlook much more negative.

Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: EUR/USD

PT_NOV_4_body_Picture_3.png, Price & Time: Currency Reprieve

Charts Created using Marketscope – Prepared by Kristian Kerr

  • EUR/USD has come under aggressive downside pressure since failing at the 1.3830 61.8% retracement of the 2011 to 2012 decline late last month
  • Our near-term trend bias is negative in the Euro and will remain so while below 1.3655
  • The 3rd square root progression of the year’s high at 1.3475 is important near-term support that needs to be breached on a close basis to signal a resumption of the broader decline
  • A minor cycle turn window is seen today
  • Only aggressive strength back over the 8th square root progression of the year’s low at 1.3655 would turn us positive on the Euro again

EUR/USD Strategy: Like selling into strength over the next couple of days.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

EUR/USD

1.3425

*1.3475

1.3505

1.3545

*1.3655

Price & Time Analysis: AUD/USD

PT_NOV_4_body_Picture_2.png, Price & Time: Currency Reprieve

Charts Created using Marketscope – Prepared by Kristian Kerr

  • AUD/USD has fallen sharply since failing at the 200-day moving average near .9755 in late October
  • Our near-term trend bias is lower while below .9600
  • A Fibonacci/Gann confluence near .9410 is an important near-term pivot with weakness below needed to force the next important leg lower in the Aussie
  • Late this week is a very minor cycle turn window
  • Only a move through the 8th square square root progression of the year’s low near .9600 would shift our near-term trend bias positive

AUD/USD Strategy: Like the short side while below .9600.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

AUD/USD

*0.9410

0.9460

0.9505

0.9545

*0.9600

Price & Time Analysis: GBP/USD

PT_NOV_4_body_Picture_1.png, Price & Time: Currency Reprieve

Charts Created using Marketscope – Prepared by Kristian Kerr

  • GBP/USD closed at its lowest levels since mid-September on Friday
  • Our near-term trend bias is negative in Cable while below the 2nd square root progression of the year’s high at 1.6085
  • The 9th square root progression of the year’s low at 1.5895 is a clear near-term pivot with traction below needed to spur the next leg lower in the exchange rate
  • A minor cycle turn window is seen today
  • A recover back through 1.6085 would turn us positive on Sterling

GBP/USD Strategy: Like the short side while below 1.6085.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

GBP/USD

1.5840

*1.5895

1.5970

1.6010

*1.6085

--- 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 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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