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Price & Time: Technical Levels to Watch After All the Event Risk

Price & Time: Technical Levels to Watch After All the Event Risk

Kristian Kerr, Sr. Currency Strategist

Talking Points

  • Crude Looks to be nearing a low this month
  • Minor Euro cycle turn window seen today
  • USD/JPY closing in on important resistance

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Focus Chart of the Day: CRUDE

PT_NOV_7_body_Picture_3.png, Price & Time: Technical Levels to Watch After All the Event Risk

Sentiment in Crude as measured by DSI (Daily Sentiment Index) dropped to just 9% bulls on Tuesday. As we have pointed out in past notes, such extremes in sentiment are often seen around market turning points and is key in identifying potential counter-trend trading opportunities. Another major variable we look for is a supportive cyclical picture. In Crude we see potentially important turn windows next week and around the 22nd of the month. Our biggest problem with Crude at the moment is price given the commodity is still a ways away from our idealized support level of 91.00. This marks a convergence of the 2nd square root progression of the year’s high and the 78.6% retracement of the April to August advance. A successful test of this support area next week or around the 22nd should set off counter-trend move higher of some importance.

Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: USD/JPY

PT_NOV_7_body_Picture_2.png, Price & Time: Technical Levels to Watch After All the Event Risk

Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/JPY continues to trade near the middle of a multi-month contracting range
  • Our near-term trend bias is higher in the rate while over 96.55
  • The 61.8% retracement of the September to October decline at 99.05 is key resistance with traction above needed to signal the start of a more important directional move higher
  • A minor cycle turn window is seen early next week
  • Only weakness below the 7th square root progression of the year’s high at 96.55 would turn the near-term trend bias back to negative

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

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

USD/JPY

1.3425

*1.3475

98.65

*99.05

*1.3635

Price & Time Analysis: EUR/USD

PT_NOV_7_body_Picture_1.png, Price & Time: Technical Levels to Watch After All the Event Risk

Charts Created using Marketscope – Prepared by Kristian Kerr

  • EUR/USD remains in consolidation mode above the 3rd square root progression of the year’s high at 1.3475
  • Our near-term trend bias is lower while below the 50% retracement of the Late October/early November decline at 1.3635
  • A daily close below 1.3475 is needed to confirm a resumption of the downtrend
  • Today is a minor cycle turn window in the Euro, but late next week is a major one
  • Aggressive strength back over 1.3635 would focus immediate attention higher in the rate

EUR/USD Strategy: Like the short side while below 1.3635, but some caution required here as a turn today could lead to a move higher lasting a week.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

EUR/USD

1.3425

*1.3475

1.3510

1.3595

*1.3635

--- 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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