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Price & Time: Peak in Gold?

Price & Time: Peak in Gold?

Kristian Kerr, Sr. Currency Strategist

Talking Points

  • Cyclical picture turns negative in Gold over next few days
  • USD/JPY reverses from just below key support level
  • GBP/USD closing in on key upside attraction

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Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: USD/JPY

PT_JAN_27_body_Picture_3.png, Price & Time: Peak in Gold?

Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/JPY fell to its lowest level since early December earlier today before reversing sharply higher
  • Our near-term trend bias is lower in the exchange rate while below 103.75
  • The 38% retracement of the October to January advance near 102.00 remains an important downside pivot with a daily close below required to prompt another material leg lower in the rate
  • A turn window today suggests USD/JPY will probably rally for at least a few days
  • A close over 103.75 would shift our near-term trend bias to positive

USD/JPY Strategy: Like only reduced short positions while below 103.75.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

USD/JPY

101.35

*102.00

102.75

102.80

*103.75

Price & Time Analysis: GBP/USD

PT_JAN_27_body_Picture_2.png, Price & Time: Peak in Gold?

Charts Created using Marketscope – Prepared by Kristian Kerr

  • GBP/USD traded to its highest level since April of 2011 on Friday before encountering resistance near the 200% extension of the October to November decline at 1.6660
  • Our near-term trend bias is higher in Cable while over 1.6410
  • The 1.6660 level is now a key near-term upside pivot with traction above needed to expose an important Fibonacci/Gann attraction at 1.6730
  • The middle of this week is a minor cycle turn window
  • On a daily close below the 2nd square root realtionship of the year’s high at 1.6410 would turn us negative on the Pound

GBP/USD Strategy: Favor the long side while over 1.6410.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

GBP/USD

*1.6410

1.6540

1.6570

1.6615

*1.6660

Focus Chart of the Day: GOLD

PT_JAN_27_body_Picture_1.png, Price & Time: Peak in Gold?

Gold traded at its highest level since mid-November earlier today before encountering resistance just above the 38% retracement of the August to December decline at 1276. A cycle turn window here suggests the metal is vulnerable to at least a short term peak. With the cyclical picture turning more negative over the next few days we should learn a lot about the true strength of the latest uptrend in XAU/USD. Modest weakness that holds above 1229 would be seen as very supportive, while sustained weakness below this level would warn that the rise over the past few weeks has just been another correction within the broader decline. A daily close over 1276 would remove the immediate negative cyclical risk and signal that the medium-term uptrend is resuming.

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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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