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Talking Points

  • EUR/GBP flirting with important technical break
  • USD/CHF fails at important resistance zone
  • Gold bottoms during important cycle turn window
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Focus Chart of the Day: EUR/GBP

PT_4th_qrtr_body_Picture_4.png, Price & Time: 4th Quarter Trends Underway?The 1x1 Gann angle line in EUR/GBP from the August high of .8768 has proven strong resistance so far. On Friday of last week it came in at about .8510 which proved to be the high of the day and the high so far of the rebound from .8330. Earlier today the Gann line (now closer to .8490) was briefly overcome, but a daily close over the level is really required to confirm a break and signal that the move higher this month has been more than just a correction of the prevailing downtrend. From a cyclical perspective, the next turn window of significance is looks to be late next week for the cross. We still like buying it on any weakness over the next couple of days.

Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: USD/JPY

PT_4th_qrtr_body_Picture_3.png, Price & Time: 4th Quarter Trends Underway?Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/JPYcontinues to meander around the 98.00 area
  • Wednesday’s daily close over 98.60 has shifted our near-term trend bias back to positive
  • However, strength over the 4th square root progression of the year’s high at 99.65 is really needed to get us more excited about further material upside
  • Some minor turn windows are seen on Friday and the middle of next week
  • It would take a decline below the 7th square root progression of the year’s high at 96.60 to turn us negative on the exchange rate
USD/JPY Strategy: Narrowing range is proving frustrating. Like being square until we get some more clarity.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

USD/JPY

*96.60

97.55

98.05

98.60

*99.65

Price & Time Analysis: USD/CHF

PT_4th_qrtr_body_Picture_2.png, Price & Time: 4th Quarter Trends Underway?Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/CHF failed yesterday at a convergence of the 8th square root progression and the 2x1 Gann angle line of the 2012 high near .9175
  • Our near-term trend bias remains lower while below this important resistance level
  • The 10th square root progression of the 2012 high at .8975 remains an important attraction and a daily close below this level is really needed to signal a broader downside resumption
  • A turn window is seen around the middle of next week
  • A move through .9175 at any time would turn us immediately positive on the exchange rate.
USD/CHF Strategy: Retaining existing short positions, but now against .9175 (absolute basis) versus prior .9155 (daily close).

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

USD/CHF

*0.8975

0.9015

0.9035

0.9110

*0.9175

Price & Time Analysis: GOLD

PT_4th_qrtr_body_Picture_1.png, Price & Time: 4th Quarter Trends Underway?Charts Created using Marketscope – Prepared by Kristian Kerr

  • XAU/USD has rebounded sharply from the 1250 support area during the medium-term cycle turn window slated for this week
  • A daily close over the 2nd square root progresion of Tuesday’s low at 1322 will shift the near-term trend bias to positive in the metal
  • The 1x1 Gann angle line of the year’s closing low at 1264 remains critical support
  • Early next week is a minor cycle turn window
  • Weakness below 1264 on a daily close basis is really required to signal that a more important decline is still unfolding
XAU/USD Strategy: Square here, but may look to buy on a daily close over 1322.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

XAU/USD

*1264

1276

1315

*1322

1348

--- 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

Looking for a way to pinpoint sentiment extremes in real time? Try the Speculative Sentiment Index.

To contact Kristian, e-mail kkerr@fxcm.com. Follow me on Twitter @KKerrFX

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