Filed Under:
Talking Points

  • Important cyclical timing seen next week in the Euro
  • USD/JPY fails at key Fibonacci resistance
  • Gold churns above key support level
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Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: USD/JPY

PT_DEC_23_body_Picture_3.png, Price & Time:  Why Next Week is Cyclically Important for the Euro  Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/JPY has come under modest pressure since failing last week at the 100% extension of the September/October decline at 104.55
  • Our near-term trend bias is positive on the rate while over 102.00
  • The 100% extension of the September/October decline at 104.55 remains an important near-term pivot and gateway to further upside
  • A cycle turn window is seen later this week
  • Only a daily close below the 2nd square root progression of the year’s high at 102.00 would turn us negative on USD/JPY
USD/JPY Strategy: Favor the long side while over 102.00.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

USD/JPY

*102.00

103.10

103.80

104.25

*104.55

Price & Time Analysis: GOLD

PT_DEC_23_body_Picture_2.png, Price & Time:  Why Next Week is Cyclically Important for the Euro  Charts Created using Marketscope – Prepared by Kristian Kerr

  • XAU/USD closed at its lowest level in over three years last week before finding support at the 1x2 Gann angle line of the 2012 closing high
  • Our near-term trend bias is lower in Gold while below the 1x2 Gann angle line of the August high at 1249
  • The 1x2 Gann angle line of the 2012 high now at 1184 is key support with a close below needed to trigger another push lower in the metal
  • A medium-term cycle turn window is seen late next week
  • Traction over 1249 would turn us positive on Gold
XAU/USD Strategy: Favor the short side while under 1249.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

XAU/USD

1156

*1184

1199

1215

*1249

Focus Chart of the Day: EUR/USD

PT_DEC_23_body_Picture_1.png, Price & Time:  Why Next Week is Cyclically Important for the Euro  Next week continues to be a focal point for us in EUR/USD from a timing perspective as several long-term cycles align there. Perhaps the most important is a 17.2 month count from the 2012 low in the Euro. 17.2 months is significant as it is made up of two 8.6 month “Pi cycle” lengths discovered by Princeton Economics’ Martin Armstrong. We have noticed over the years that trends have a strong tendency to terminate around this 17-month interval. The decline in the S&P 500 during the Financial Crisis, for instance, lasted almost exactly 17 months. With the Euro having rallied pretty steadily since its low in July of 2012 it is at some risk here of peaking. Of course just because cycles align does not mean that a reversal is assured. Continued strength in the Euro past the 2nd week of January would undermine this potential negative cyclical influence.

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