Filed Under:
Talking Points

  • USD/JPY closing in on important upside test
  • EUR/USD slows decline
  • S&P 500 grinding through important long-term resistance
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Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: EUR/USD

PT_Jan_10_body_Picture_3.png, Price & Time: Big Day for USD/JPYCharts Created using Marketscope – Prepared by Kristian Kerr

  • EUR/USD has come under steady downside pressure since failing late last year at a key long-term retracement near 1.3900
  • Our near-term trend bias is lower in the Euro while below the 2013 closing high at 1.3800
  • The 3rd square root relationship of the 2013 absolute high at 1.3540 is in important downside pivot with weakness below needed to confirm another leg lower in the rate
  • Minor cycle turn windows are seen early and late next week
  • The 1.3655 area is interim resistance, but only over 1.3800 on a daily close basis turns us positive on the Euro
EUR/USD Strategy: Favor the short side while below 1.3800

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

EUR/USD

1.3490

*1.3540

1.3590

1.3655

*1.3800

Price & Time Analysis: S&P 500

PT_Jan_10_body_Picture_2.png, Price & Time: Big Day for USD/JPYCharts Created using Marketscope – Prepared by Kristian Kerr

  • S&P 500 remains in very persistent uptrend
  • Our near-term trend bias is higher while above 1823
  • A variety of long-term Fibonacci and Gann price relatinships overhead at 1865 and 1875 look like the next critical resistance zone and potential point of failure
  • A cycle turn window is seen around the end of the month
  • A daily close below 1823 would warn that the index has peaked ahead of schedule and woud turn us negative
S&P 500 Strategy: Like the long side while over 1823

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

S&P 500

1813

*1823

1846

1850

*1865

Focus Chart of the Day: USD/JPY

PT_Jan_10_body_Picture_1.png, Price & Time: Big Day for USD/JPYUS employment data will be released this morning. This is an important day for the FX markets where big levels often get tested. In the aftermath of the data today we will be paying close attention to USD/JPY as spot is very near the 61.8% retracement of the 2007 to 2011 decline at 105.55. How the rate reacts around this important resistance should shed light on the next important directional move in USD/JPY. We have been wary of recent strength in the rate as positive sentiment remains stubbornly high and near historical extremes. This is a potential problem for the rate, but up to now it has held all the right support levels and hasn’t really done anything to warrant fighting what is clearly a very strong uptrend. This could (and we emphasize could) change today with some sort of price action failure around 105.50. A clear push through 105.50 on a daily close basis, on the other hand, probably sets up another leg higher. This week’s low at 103.90 is now critical support for USD/JPY as a move below there will trigger a host of different “topping patterns” used in classical technical analysis.

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