Talking Points
- Next couple of days key for the pound
- EUR/USD stuck between Gann levels
- S&P 500 closing in on important upside attraction
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Foreign Exchange Price & Time at a Glance:
Price & Time Analysis: EUR/USD
Charts Created using Marketscope – Prepared by Kristian Kerr
- EUR/USD is in consolidation mode near the 3rd square root relationship of the year’s low
- Our near-term trend bias remains positive while above 1.1315
- Interim resistance is seen around 1.1445, but a move through 1.1515 is really required to signal that a more meaningful extension higher is underway
- An important turn window is eyed here
- A close below 1.1315 would turn us negative on the exchange rate
EUR/USD Strategy: Like holding reduced long positions while above 1.1315.
| Instrument | Support 2 | Support 1 | Spot | Resistance 1 | Resistance 2 |
|---|---|---|---|---|---|
| EUR/USD | 1.1315* | 1.1360 | 1.1405 | 1.1445 | *1.1515 |
Price & Time Analysis: S&P 500
Charts Created using Marketscope – Prepared by Kristian Kerr
- S&P 500 traded to a new all-time high late last week
- Our near-term trend bias is positive while above 2064
- The 3rd square root relationship of the year’s low at 2108 is the next upside attraction with traction above needed to confirm that a new leg higher is underway
- A minor turn window is seen on Thursday
- A close below 2064 would turn us negative on the index
S&P 500 Strategy: Like the long side while 2064 holds.
| Instrument | Support 2 | Support 1 | Spot | Resistance 1 | Resistance 2 |
|---|---|---|---|---|---|
| S&P 500 | *2064 | 2077 | 2094 | *2108 | 2124 |
Focus Chart of the Day: GBP/USD
As we noted yesterday, this week is shaping up to be an important one for the euro from a near-term timing perspective as various cyclical relationships will be aligning over the next couple of days. The same can be said about GBP/USD as the exchange rate has similar influences these next few days. Our view is the same in the sense that if Cable is going to see a quick and orderly resumption of the downtrend then this is probably where it should happen. Continued strength in the pound into the latter part of this week through key resistance at 1.5440 would serve to undermine these negative cyclical influences and set the stage for a deeper correction higher over the next couple of weeks into the next important ‘turn window’ eyed around the first week of March.
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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
