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Price & Time: Kiwi - Down Before Up?

Price & Time: Kiwi - Down Before Up?

Kristian Kerr, Sr. Currency Strategist

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 broke below several minor retracements yesterday before finding support at the 3rd square root relationship of the year’s high at 122.45
  • Our near-term trend bias is lower in the exchange rate while below 124.80
  • A move under 122.00 is needed to set off a more important leg lower in the rate
  • A very minor turn window is eyed tomorrow
  • A close above 124.80 would turn us positive again on the pair

USD/JPY Strategy: Square.

InstrumentSupport 2 Support 1SpotResistance 1Resistance 2
USD/JPY*122.00122.45123.75123.75*124.80

Price & Time Analysis: USDOLLAR

Charts Created using Marketscope – Prepared by Kristian Kerr

  • USDOLLAR came under further pressure yesterday to test the 50% retracement of the May-June range near 11,840
  • Our near-term trend bias is lower in the index whie below 12,050
  • Traction under 11,840 is needed to set off a more serious decline in the index
  • Very minor turn windows are seen tomorrow and around the middle of next week
  • A daily close over 12,050 would turn us positive on the index

USDOLLAR Strategy: Like selling on strength against 12,050.

InstrumentSupport 2 Support 1SpotResistance 1Resistance 2
USDOLLAR11,790*11,84011,88511,900*12,050

Focus Chart of the Day: NZD/USD

We had more central bank inspired volatility overnight in the FX markets as the RBNZ decided to cut the OCR and hint at further cuts to in the near future. Not surprisingly, NZD/USD fell sharply in response to record a new low for the year. The exchange rate has been a leader to the downside since May, but some caution is required heading into next week as various forms of cycle analysis suggest that spot is susceptible to some sort of turn during this period (Wednesday focus). The .7000-.6980 area looks to be a clear potential reaction zone, but if this should give way we can’t rule out a move to as low as .6800 before any real basing attempts. The trendline connecting the late April and mid-May highs has been formidable resistance and traction above there (currently at .7200) is needed to confirm any sort of meaningful reversal.

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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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