Filed Under:
Talking Points

  • Euro busts through key resistance to trade at 2-year highs
  • USD/JPY closing in on important long-term retracement
  • GBP/USD at multi-year high, but turn window coming up
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Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: EUR/USD

PT_DEC_27_body_Picture_3.png, Price & Time: GBP/USD Trades at Highest Level in Over Two YearsCharts Created using Marketscope – Prepared by Kristian Kerr

  • EUR/USD traded to its highest level in over two years on Friday before encountering resistance at the 61.8% retracement of the 2010/2011 range at 1.3895
  • Our near-term trend bias remains positive on the Euro while over 1.3655
  • The 1.3895 level is now critical resistance with a move through this level needed to pave the way for a more impulsive push higher
  • However, a cycle turn window of significance is seen next week and the rate is vulnerable to a turn
  • A daily close below the 8th square root relationship of the year’s low at 1.3655 would turn us negative on the Euro
EUR/USD Strategy: Favor the long side while over 1.3655

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

EUR/USD

*1.3655

1.3770

1.3841

*1.3895

1.3950

Price & Time Analysis: USD/JPY

PT_DEC_27_body_Picture_2.png, Price & Time: GBP/USD Trades at Highest Level in Over Two YearsCharts Created using Marketscope – Prepared by Kristian Kerr

  • USD/JPY traded at its highest level in over five years on Friday
  • Our near-term trend bias remains higher in the exchange rate while over 103.70
  • The 61.8% retracement of the 2007/2011 decline is at 105.55 and this looks like the next natural inflection point for the pair
  • A minor cycle turn window is seen over the next few days
  • A daily close below 103.70 would turn us negative on USD/JPY
USD/JPY Strategy: Favor the long side while over 103.70.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

USD/JPY

103.10

*103.70

104.85

*105.55

106.10

Focus Chart of the Day: GBP/USD

PT_DEC_27_body_Picture_1.png, Price & Time: GBP/USD Trades at Highest Level in Over Two YearsCable has a seasonal tendency to rally aggressively in the last few weeks of the year. This year looks to be no different as the exchange rate busted through key resistance near 1.6500 today and recorded a new high for 2013. January, however, is one of the weaker months for the Pound on a seasonal basis and a simple trading day count suggests it may very well be so again as GBP/USD looks cyclically vulnerable to a peak of some importance next week. Key resistance for us heading into this cycle turn window is at 1.6615/60 then at 1.6730/55. The former represents a convergence of the 15th square root relationship and the 1x3 Gann angle line of the year’s low while the latter is a confluence of the 127% extension of the January/July range, the 61.8% projection of the July/October advance and the 16th square root relationship of the year’s low.

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