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Price & Time: USD Continues to Frustrate

Price & Time: USD Continues to Frustrate

Kristian Kerr, Sr. Currency Strategist

Talking Points

  • EUR/USD stalls ahead of important pivot
  • USD/CAD stalls out after recording multi-years high
  • USDOLLAR stuck below key retracement

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Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: EUR/USD

ChartPrepared by Kristian Kerr

  • EUR/USDcontinues to consolidate above critical support around 1.0800
  • Our near-term trend bias is lower in the exchange rate while below 1.1100
  • A daily close under 1.0800 is needed to set off a more important move lower in the euro
  • A very minor turn window is eyed tomorrow
  • A daily close above 1.1100 would turn us positive again on the euro

EUR/USD Strategy: Like the short side while below 1.1100

InstrumentSupport 2 Support 1SpotResistance 1Resistance 2
EUR/USD*1.08001.08301.09501.0955*1.1100

Price & Time Analysis: USD/CAD

ChartPrepared by Kristian Kerr

  • USD/CADhas pulled back from the decade highs recorded last week
  • Our near-term trend bias is positive in funds while above 1.2980
  • A move through 1.3225 is needed to set up a new leg higher in the exchange rate
  • A minor turn window is seen tomorrow
  • A daily below the 2nd square root relationship of last week’s at 1.2980 would turn us negative on USD/CAD

USD/CAD Strategy: Like the long side while over 1.2980

InstrumentSupport 2 Support 1SpotResistance 1Resistance 2
USD/CAD*1.29801.30751.31051.3175*1.3225

Focus Chart of the Day: USDOLLAR

The FXCM US DOLLAR Index (equally weighted basket of USD versus EUR, JPY, GBP & AUD) has had several good chances to breakout over the past few weeks, but has failed at every opportunity. In our view, the longer it sits here without breaking out the greater the risk of a sharp correction. The Fed looks to be trying to stack the deck for a breakout in rates and by default USD with a heavy dose of speakers to start the week (following the markets lackluster response to the data on Friday). It will be interesting to see if the gambit works. Failure to generate traction above the 78.6% retracement of the April – May decline around 12,050 would be a big warning sign that USD is indeed in trouble. A key pivot in the event of a topside failure remains the late July low at 11,965 as weakness below there would signal that a high of some significance is in place.

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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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