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Price & Time: Sterling Misdirection?

Price & Time: Sterling Misdirection?

Kristian Kerr, Sr. Currency Strategist

Talking Points

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Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: USD/JPY

ChartPrepared by Kristian Kerr

  • USD/JPY found support last week at the 3rd square root relationship of the year’s high near 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 Tuesday
  • A close above 124.80 would turn us positive again on the pair

USD/JPY Strategy: Like selling tomorrow on strength against 124.80.

InstrumentSupport 2 Support 1SpotResistance 1Resistance 2
USD/JPY*122.00122.45123.60124.10*124.80

Price & Time Analysis: NZD/USD

Chart Prepared by Kristian Kerr

  • NZD/USD closed at its lowest level in almost 5-years on Friday
  • Our near-term trend bias is lower in the Bird while below .7000 (closing basis)
  • Traction under A Fibonacci level at .6970 is needed to kick off the next leg lower
  • An important turn window is eyed over the next few days
  • A daily close over .7000 would turn us positive on NZD/USD

NZD/USD Strategy: Like taking profit on short positions into this turn window.

InstrumentSupport 2 Support 1SpotResistance 1Resistance 2
NZD/USD.6900*.6970.6975*.7000.7110

Focus Chart of the Day: GBP/USD

Chart Prepared by Kristian Kerr

The daily GBP/USD chart personifies the lack of conviction in the FX market at the moment. Is the broader downtrend about to re-assert itself or is spot about to undergo a deeper upside correction? Given that the pound turned right during a key date last week we had been open to the former, but on Friday the exchange rate closed right on the 61.8% retracement of the late May range. This morning it has turned lower leaving the open the possibility of a broader head & shoulders top and potential primary downtrend resumption. The next few days look important in this regard from a short-term timing perspective. If the broader decline is re-asserting itself here then it should happen fairly quickly. The neckline of the H&S pattern comes in around 1.5250 and this level is obviously now a key pivot with traction below needed to confirm that the pound has turned the corner. A daily settlement back over Friday’s high near 1.5600 would re-focus attention on a re-test of the May high.

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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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