Talking Points
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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 sideways to lower range
- Our near-term trend bias is lower while below 121.00
- The 119.00 area isn an interim pivot, but weakness below 118.40/20 is really needed to kick off a more serious decline in the rate
- A very minor cycle turn window is seen here
- A close above 121.00 would turn us positive on the exchange rate
USD/JPY Strategy: Like holding a reduced short position while below 121.00.
| Instrument | Support 2 | Support 1 | Spot | Resistance 1 | Resistance 2 |
|---|---|---|---|---|---|
| USD/JPY | *118.20/40 | 119.00 | 119.95 | 120.55 | *121.00 |
Price & Time Analysis: GBP/USD
Charts Created using Marketscope – Prepared by Kristian Kerr
- GBP/USDovercame the 200-day moving average this morning to trade at its highest level in five months
- Our near-term trend bias higher in Cable while over 1.5400
- A minor pivot is seen around 1.5750 ahead of the 50% retracement of the July-April advance near 1.5880
- A minor turn window is seen tomorrow
- A daily close under 1.5400 would turn us negative on the pound
GBP/USD Strategy: Like the long side while over 1.5400.
| Instrument | Support 2 | Support 1 | Spot | Resistance 1 | Resistance 2 |
|---|---|---|---|---|---|
| GBP/USD | *1.5400 | 1.5570 | 1.5680 | 1.5750 | *1.5880 |
Focus Chart of the Day: EUR/USD
EUR/USD reversed smartly from Gann resistance around 1.1400 last week during a key cycle turn window. Downside follow through has been rather limited, however, as the pair found support yesterday near a median line drawn from the year’s low in the 1.1150 area. The jury is still out on the importance of last week’s high, but the USD weakness being exhibited in some of the other European pairs does not bode well for a broader downside resumption happening here. A move under 1.1150 and more importantly 1.1060 is needed in the next few sessions to convince us that a more important move lower is indeed taking shape. Any strength over last week’s high would invalidate the potential negative cyclicality at work and set the stage for a much more important push higher in the euro.
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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
