Price & Time: Focus on the Commodity Currencies

Talking Points

• Break looming in USD/JPY?
• SPX turn window ahead
• Looking to fade a USD/CAD rally after NFPs

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Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: USD/JPY

Charts Created using Marketscope – Prepared by Kristian Kerr

• USD/JPY remains in the middle of a 3-month range
• Our near-term trend bias is lower while below 103.10
• A move under 101.35 is needed to trigger a more important decline
• The first half of next week is an important cycle turn window for the exchange rate
• A daily close over 103.10 would shift the near-term trend bias higher

USD/JPY Strategy: Square, but may look to get short early next week.

Price & Time Analysis: S&P 500

Charts Created using Marketscope – Prepared by Kristian Kerr

• SPX has rallied steadily since finding support at the 1813 2nd square root relationship of the all-time high around the middle of the month
• Our near-term trend bias higher in the SPX while over 1849
• The 1900 level is clear resistance with strength above exposing a key Fib confluence near 1920
• A cycle turn window of some importance is seen next week
• A move under 1849 would turn attention lower

SPX Strategy: Like the long side while over 1849.

Focus Chart of the Day: USD/CAD

USD/CAD failed just shy of the 1.1065 50% retracement of the March/April decline last week. This past Tuesday’s move lower in the exchange rate looks to be an initial resumption of that downtrend. Cyclical analysis argues that the next couple of trading days should see some strength in Funds with a secondary peak (perhaps even a higher high) eyed around Friday or Monday. Assuming the rate avoids too much strength into this timeframe it should then turn down again by the middle of next week. A daily close below 1.0940 at anytime would confirm a downside resumption while any strength after Monday of next week over 1.1065 would completely invalidate the burgeoning negative cyclical picture.

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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