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Price & Time: USD/JPY breaking point

Price & Time: USD/JPY breaking point

2014-07-02 12:30:00
Kristian Kerr, Sr. Currency Strategist
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Talking Points

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Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: EUR/USD

Price & Time: USD/JPY breaking point

Charts Created using Marketscope – Prepared by Kristian Kerr

  • EUR/USD touched its highest level in over a month before encountering ressitance near the 38% retracement of the May/June decline near 1.3690
  • Our near-term trend bias is higher in the euro while over 1.3590
  • A breach of 1.3690 is needed to prompt a more aggressive upside push towards 1.3750/1.3800
  • An important cycle turn window is seen around the end of the week
  • A move below 1.3590 will turn us negative on the euro again

EUR/USD Strategy: Square, but think the euro is setting up for a reversal around the end of the week. Need to see price action turn more negative before positioning.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

EUR/USD

*1.3590

1.3640

1.3660

*1.3690

1.3750

Price & Time Analysis: USD/CAD

Price & Time: USD/JPY breaking point

Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/CAD is testing a major support zone between 1.0600 and 1.0650
  • Our near-term trend bias is lower in Funds while below 1.0750
  • A daily close under 1.0600 would further confirm the strength of the downtrend and open the way for a deeper decline
  • The end of a broad cyclical turn window is today
  • A daily close over 1.0750 is required to turn the outlook positive on USD/CAD

USD/CAD Strategy: Like reducing short positions into this key support area.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

USD/CAD

1.0580

*1.0600

1.0630

1.0640

*1.0750

Focus Chart of the Day: USD/JPY

Price & Time: USD/JPY breaking point

USD/JPY looks to be at a critical near-term juncture. The low on Monday off the 78.6% retracement of the late May/June advance came during a cyclical turn window which argues the rate should try to turn up here. However, a convergence of arguably more important cyclical relationships around the middle of the month suggest USD/JPY will remain weak until then. So which is it? We can’t tell for certain. Levels that we will be watching to clear up the picture are 102.00 on the upside as strength though here would confirm Monday’s low as something more than just a bounce. Monday’s low at 101.22 is obviously important on the downside as a break of this level would invalidate it as a cycle bottom of any importance and pave the way for test of the year’s low. We slightly favor this scenario at the moment given the way the most recent decline has unfolded.

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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.

--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

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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