DailyFX.com -

Talking Points

  • Key week for the euro
  • Gold lacking momentum for now
  • Important month for the FX markets as a whole?

Get real time volume on your charts for free. Click HERE

Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: EUR/USD

Price & Time: Known Unknown

Charts Created using Marketscope – Prepared by Kristian Kerr

  • EUR/USD touched its lowest level in almost nine months today
  • Our near-term trend bias is lower in the euro while under 1.3450
  • The 1.3315/1.3300 area is the next important downside attraction
  • An important cycle turn window is seen this week
  • A move over 1.3450 would turn us positive on the euro

EUR/USD Strategy: Like only a minimal short position while below 1.3450. Will look to stop and reverse on any move through 1.3450.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

EUR/USD

*1.3300

1.3330

1.3340

1.3400

*1.3450

Price & Time Analysis: GOLD

Price & Time: Known Unknown

Charts Created using Marketscope – Prepared by Kristian Kerr

  • XAU/USD is in consolidation mode above 1280
  • Our near-term trend bias is lower while below 1300
  • Critical support is eyed between 1280 and 1262 with weakness below needed to kick off a more important move lower
  • A cycle turn window is eyed late this week
  • A move over 1300 would turn us positive on the metal

XAU/USD Strategy: Square, but will look to go long on a move through 1300.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

XAU/USD

*1262

1280

1286

*1300

1321

Focus Chart of the Day: AUD/NZD

Price & Time: Known Unknown

One of the more interesting cyclical frequencies I track is the Armstrong 8.6 year Pi cycle. If you have any doubts about how useful it is I suggest taking a look at a chart of AUD/NZD (above) as the recent advance commenced 8.6 years from the major low in 2005 – virtually to the day! This month marks the 43rd anniversary of the collapse of Bretton Woods and the birth of the modern fiat currency era. 43 years is potentially significant to me as it falls on an 8.6 year interval (8.6 * 5 = 43). This particular cycle is interesting as it has coincided with important events in the past, most notably the devaluation of the Thai Baht in 1997 which helped kick off the Asian crisis (Pi cycle actually led by a few weeks). Are the currency markets about to undergo some sort of similar event? What Donald Rumsfeld notoriously categorized as a “known unknown”? Surveying the FX markets there certainly are plenty of FX regimes that look vulnerable at the moment (CNY, HKD, HUF, CHF etc), but the truth is these things are impossible to forecast. What we do know is that FX volatility across the board is compressed and complacency is running high much like it was in the mid 1990’s. “Minsky moments” are spawned from precisely these type of environments and taking a punt on FX vol rising from here doesn’t look so stupid anymore.

To receive Kristian’s analysis directly via email, please SIGN UP HERE.

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.

Related Articles
  1. Forex

    The Pros and Cons of a Fully Convertible Rupee

    Amid the rising economic power of India, the talks of making the Indian currency fully convertible are gaining momentum. We look at the pros and cons.
  2. Forex Fundamentals

    Chinese Yuan an Unlikely Reserve Currency

    As the world's second largest economy, China's challenge to America’s dominance includes a push to make the yuan (RMB), the world’s reserve currency. Whether it can do that now is unclear.
  3. Economics

    How Currency Enforcement Helped Sink The Trans-Pacific Partnership (TTP)

    One particular barrier to trade that has received much attention of late and caused delays in negotiations of the TPP is exchange-rate manipulation, by which a country artificially devalues its ...
  4. Forex

    Top U.S Forex News Sites

    Breaking news moves forex markets. Here are the top U.S. sites for tracking forex news.
  5. Investing

    Financial News Comparison: Bloomberg Vs. Reuters

    Access to financial information has grown with the expansion of digital news. Bloomberg and Thomson Reuters lead the pack, claiming a majority of the business information market.
  6. Economics

    Who Benefits From South Korea's Lowered Interest Rates?

    South Korea is the latest country to cut interest rates in an attempt to stimulate economic growth.
  7. Forex Education

    The Top Uses For P2P Currency Exchange

    Peer-to-peer (P2P) currency exchange networks offer a viable and cheaper alternative for buying and selling currencies.
  8. Forex

    Steps To Open An Offshore Forex Account

    Here is a simple breakdown of how to open an offshore forex account for US-based users, including legal requirements.
  9. Entrepreneurship

    Top Forex Trading Apps

    A brief overview of the top apps that help forex traders with on time information, charts and more.
  10. Investing Basics

    The Risks Of Buying Bitcoin

    Virtual currency is probably here to stay, but what about Bitcoin specifically? Does it have a first-to-market advantage? What are the risks involved?
RELATED TERMS
  1. No results found.

You May Also Like

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!