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Price & Time: Watch Aussie Closely Here

Price & Time: Watch Aussie Closely Here

2014-05-09 13:00:00
Kristian Kerr, Sr. Currency Strategist
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Talking Points

  • EUR/USD reverses from key cycle turn window
  • GOLD stalls at key Gann level
  • Critical couple of days for AUD/USD

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Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: EUR/USD

Price & Time: Watch Aussie Closely Here

Charts Created using Marketscope – Prepared by Kristian Kerr

  • EUR/USD touched its highest level since October 2011 yesterday (during our key cycle turn window) and then reversed sharply
  • Our near-term trend bias is now lower in the Euro
  • The 2nd square root realtionship of the year’s high at 1.3755 is a key downside pivot with weakness below this level needed to confirm that a more signfincant top is in place
  • A minor turn window is seen around the start of next week
  • Only a move through 1.3940 would turn us positive on the Euro again

EUR/USD Strategy: Like selling on strength over the next few days.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

EUR/USD

1.3705

*1.3755

1.3785

1.3875

*1.3940

Price & Time Analysis: GOLD

Price & Time: Watch Aussie Closely Here

Charts Created using Marketscope – Prepared by Kristian Kerr

  • XAU/USD advance from last week’s cycle turn window has found strong resistance at a Gann confluence between 1315/21
  • Our near-term trend bias is higher while over 1270
  • A move through 1321 is needed to re-instill upside momentum
  • A cycle turn window is seen around the middle of next week
  • Weakness below 1270 would turn us negative on the metal

XAU/USD Strategy: Like the long side while over 1270.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

XAU/USD

*1270

1286

1293

1303

*1321

Focus Chart of the Day: AUD/USD

Price & Time: Watch Aussie Closely Here

The reversal last month in AUD/USD from the .9450 8th square root relationship of the year’s low came during a key cycle turn window as it occurred right around the 100% time extension of the 2008 to 2011 advance. In our view this increases the odds of a more important top. Another time extension (100%) related to the 2Q13 and 3Q13 highs is in play over the next couple of days. A failure in the Aussie during this key cyclical period would bolster our broader negative view and set the stage for a more serious decline in the weeks ahead. Last week’s low near .9200 is an important downside pivot with weakness below this level needed to confirm that a more important peak is indeed in place. A move through .9450 on a closing basis would completely undermine this negative cyclical view.

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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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