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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.

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Foreign Exchange Price & Time at a Glance:

USD/JPY:

PT_Euros_body_Picture_4.png, Price & Time: Important Next Few Days for the EuroCharts Created using Marketscope – Prepared by Kristian Kerr

  • USD/JPY has continued to find strong resistance near the 7th square root progression of the June low in the 101.60 area
  • While over 99.05 our near-term trend bias will remain higher, but a clear break of 101.60 is needed soon to maintain the immediate upside tack in the rate
  • Near-term focused cycle studies point to Tuesday and the end of the week as potential minor turn windows
  • Immediate support is seen at the 99.65 6th square root progression of the June low
  • However, only weakness below 99.05 would undermine the near-term positive tone in the pair and turn us negative
Strategy: Like the long side on a clear break of 101.60.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

USD/JPY

*99.05

99.65

99.95

100.15

*101.60

GBP/USD:

PT_Euros_body_Picture_3.png, Price & Time: Important Next Few Days for the EuroCharts Created using Marketscope – Prepared by Kristian Kerr

  • GBP/USD pierced the 50% retracement of the June to July decline near 1.5280 on Monday to trade to its highest level in over three weeks
  • While over 1.5175 our near-term trend bias will remain higher in Cable
  • Gann resistance at 1.5325 looks like a key pivot and a close above this level is required to set up a further push towards a Fibonacci price cluster in the 1.5390 area
  • Short-term oriented time cycle studies suggest today and the end of the week are possible minor turn widnows
  • More immediate support is seen at 1.5250, but only weakness back under 1.5175 would turn us negative on Cable
Strategy: Like holding reduced long positions while over 1.5175.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

GBP/USD

*1.5175

1.5250

1.5325

*1.5325

*1.5390

XAU/USD:

PT_Euros_body_Picture_2.png, Price & Time: Important Next Few Days for the EuroCharts Created using Marketscope – Prepared by Kristian Kerr

  • XAU/USD is testing key resistance at the 4th square root progression of the year-to-date low in the 1316 area
  • A close above this level is required to set up a more meaningful advance towards 1348 and shift the trend bias to positive
  • However, some caution is advised here as the next 48 hours are a well defined cycle turn window in the metal where the broader downtrend could try to re-assert
  • The 1283 remains near-term support
  • However, weakness below 1248 is needed to signal a broader downside resumption
Strategy: Very wary of a downside resumption over the next two days. Don’t like the long side until after this cycle turn window is surpassed.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

XAU/USD

*1248

1283

1316

*1316

*1348

Focus Chart of the Day: EUR/USD

PT_Euros_body_Picture_1.png, Price & Time: Important Next Few Days for the EuroThe second half of this week looks important from a cyclical perspective for the equity markets with a top of some sort now looking possible during this timeframe. However, the Euro also has some interesting timing over the course of the next few days as several short-term Fibonacci time relationships and longer-term Pi time relationships converge over the next 48 hours. In addition, Thursday marks the anniversary of the 2012 low in EUR/USD. In Gann, anniversary dates of past significant highs and lows are often important cyclical inflection points. Given the low last July was multi-year low that led to aggressive strength over several quarters it qualifies in our book as “significant” and could influence price action later this week. There is also some potentially important timing late next week which we will update on as we approach it.

--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

Looking for a way to pinpoint sentiment extremes in Euro 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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