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Price & Time: Second Half of the Week Looks Key for the Euro

Price & Time: Second Half of the Week Looks Key for the Euro

2013-12-02 13:15:00
Kristian Kerr, Sr. Currency Strategist
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Talking Points

  • EUR/USD nearing important cycle turn window
  • USD/JPY smashes through important resistance
  • AUD/USD rebounds off key support zone

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Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: USD/JPY

PT_dec_2_body_Picture_3.png, Price & Time: Second Half of the Week Looks Key for the Euro

Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/JPY probed above the 1st square root progression of the year’s high at 102.75 to reach its highest level since late May on Monday
  • Our near-term trend bias is positive on the exchange rate while over 100.65
  • The 161.8% extension of the September/October decline at 103.05 is the next level of resistance ahead of the year’s high
  • A medium-term cycle turn window is seen next week
  • Only a daily close below the 2nd square root progression of the year’s high at 100.65 would undermine the immediate positive tone in the rate

USD/JPY Strategy: Focus on long side opportunities while over 100.65.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

USD/JPY

*100.65

101.60

102.75

103.05

*103.70

Price & Time Analysis: AUD/USD

PT_dec_2_body_Picture_2.png, Price & Time: Second Half of the Week Looks Key for the Euro

Charts Created using Marketscope – Prepared by Kristian Kerr

  • AUD/USD fell to its lowest levels since early September on Friday before rebounding from strong support at the 7th square root relationship of the October high
  • Our near-term trend bias is lower in the Aussie while below .9170
  • A convergence of several important Fibonacci and Gann levels between .9060 and .9030 suggest it is an extremely important support zone and a daily close below is needed to confirm a resumption of the broader decline
  • A medium-term cycle turn window is seen next week
  • Only a daily close over .9170 will shift our near-term trend bias to positive in the Aussie

AUD/USD Strategy: We like being flat following the rebound from key support.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

AUD/USD

*0.9060

0.9100

0.9145

*0.9170

0.9220

Focus Chart of the Day: EUR/USD

PT_dec_2_body_Picture_1.png, Price & Time: Second Half of the Week Looks Key for the Euro

The next week or so looks to be quite important for the Euro from a cyclical perspective. Starting around Wednesday and extending to next Tuesday a myriad of different cyclical methodologies all begin to converge. Perhaps the most important is a Fibonacci time relationship with last year’s low and the 1Q13 high at the end of the week. With EUR/USD having rallied steadily for over three weeks now a secondary high (versus the October high) of some kind forming during this turn window is clearly the favored scenario. Only aggressive weakness on a daily close basis over the next few days below 1.3430 would warn that the Euro has peaked ahead of schedule. Such aggressive weakness could also raise the possibility of a cyclical inversion (low instead of a high). Both look like relatively low probability scenarios at the moment.

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--- 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

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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