Filed Under:
Talking Points

  • USD/JPY bounces sharply, but still vulnerable
  • EUR/USD stalls near minor retracement
  • Gold closes above important Gann level
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Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: EUR/USD

PT_Jan_15_body_Picture_3.png, Price & Time: In Search of the Opening Range Breakout in USD/JPYCharts Created using Marketscope – Prepared by Kristian Kerr

  • EUR/USD has been in recovery mode since finding support last week just ahead of the 3rd square root relationship of the 2013 high at 1.3540
  • Our near-term trend bias is lower in the Euro while below 1.3800
  • The 1.3540 area remains a critical near-term pivot with weakness below this level needed soon to prompt a continuation of the downtrend
  • The latter half of next week looks to be the next important cycle turn window
  • Only a close over 1.3800 would turn us positive on the Euro
EUR/USD Strategy: Like selling into strength while below 1.3800.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

EUR/USD

*1.3540

1.3590

1.3615

1.3680

*1.3800

Price & Time Analysis: GOLD

PT_Jan_15_body_Picture_2.png, Price & Time: In Search of the Opening Range Breakout in USD/JPYCharts Created using Marketscope – Prepared by Kristian Kerr

  • XAU/USD closed over the 1247 2nd square root relationship of the 2013 low on Monday
  • Our near-term trend bias is now higher in the metal
  • The 88.6% retracement of the December range at 1257 is immediate resistance and traction above is needed to further confirm the importance of Monday’s break and set up further upside
  • Caution is required as a cycle turn window is seen over the day or so
  • Only aggressive weakness below the 1st square root relationship of the 2013 low at 1213 would turn us negative on Gold
XAU/USD Strategy: Like being square for a few more days.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

XAU/USD

*1213

1224

1236

*1257

1270

Focus Chart of the Day: USD/JPY

PT_Jan_15_body_Picture_1.png, Price & Time: In Search of the Opening Range Breakout in USD/JPYSome wild price over the past couple of days (for a low vol environment) in the Yen and the Nikkei. Whipsaw is often the name of the game in January as yearly institutional P&Ls are re-set at the start of the month. There is understandably a lot of angst around this time as money managers big and small don’t want to miss out on the first “clear” directional move of the year and start off lagging their respective benchmarks. The psychology in the first month of the calendar year is not unlike the psychology we used to witness in pit traded markets at the open when there would be a few false starts in the first hour of trading leaving a defined range. The break of this range or what market veterans would refer to as an “opening range breakout” would usually lead to the first real directional move of the day. The year’s opening range in USD/JPY after yesterday’s reversal looks set at 105.43 on the topside and 102.84 on the low end. A break of one should prompt that much sought after first “clear” directional move of 2014. We still favor lower given the rate’s double failure at important long-term retracement resistance near 105.50.

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