Filed Under:
Talking Points

  • Important cycle turn window seen around the end of the year in EUR/USD
  • USD/JPY comes off multi-year high
  • GBP/USD nearing key support level
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Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: USD/JPY

PT_Dec_16_body_Picture_3.png, Price & Time: What Now For the Euro?Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/JPY moved above 104.00 last week to trade at its highest level since 2008
  • Our near-term trend bias is positive on the rate while above 101.65
  • Interim resistance is seen around 104.00 ahead of the next key attraction near the 104.55 100% extension of the September/October decline
  • A medium-term cycle turn window late last week could see the rate come under some pressure if 104.00 cannot be overcome soon
  • Only a daily close below 101.65 would turn us negative on USD/JPY
USD/JPY Strategy: Favor the long side while over 101.65

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

USD/JPY

*101.65

102.10

103.05

104.00

*104.55

Price & Time Analysis: GBP/USD

PT_Dec_16_body_Picture_2.png, Price & Time: What Now For the Euro?Charts Created using Marketscope – Prepared by Kristian Kerr

  • GBP/USD traded last week to its highest level since 2011 before reversing
  • Our near-term trend bias remains higher in Cable while over the 1.6210 2nd square root relationship of the year’s high
  • The 1.6460 area is interim resistance ahead of a key Fibonacci/Gann convergence at 1.6500
  • A minor cycle turn window is seen around the middle of the week
  • A daily close under 1.6210 would turn us negative on the Pound
GBP/USD Strategy: Favor the long side while over 1.6210

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

GBP/USD

*1.6210

1.6250

1.6340

1.6380

*1.6460

Focus Chart of the Day: EUR/USD

PT_Dec_16_body_Picture_1.png, Price & Time: What Now For the Euro?Looking at exchange rates this morning it seems little has changed in the week I have been absent. Perhaps the most notable price action from a cyclical perspective has been in EUR/USD as the rate blew through an important cycle turn window around the start of the month. In many ways this strength in the single currency is not all that surprising as December has a seasonal tendency to be one of the stronger months in the rate. That said, January has a tendency to be one of the worse. With important longer-term Pi and Fibonacci cyclical relationships converging in about two weeks and sentiment approaching contrarian extremes (DSI at 85% bulls as of Friday) I believe the Euro is setting up for an important top of sorts around the end of the year. Given the proximity of the October higher, it is likely to materialize from above 1.3830 with 1.3880 and 1.3990 the next key resistance zones of note.

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