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Talking Points

  • Euro gearing up for next big move
  • AUD/NZD at important cyclical juncture
  • Equity market turn window this week
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Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: EUR/USD

Price & Time: Time To Be Skeptical of Equity Market Strength

Charts Created using Marketscope – Prepared by Kristian Kerr

  • EUR/USD remains in a sideways to higher range
  • Our near-term trend bias is lower in the euro while under 1.3650
  • A move under 1.3570 is needed to signal a downside resumption and set up a test of more important support levels near 1.3500
  • A very minor cycle turn window is tomorrow
  • Any strenght over 1.3650 will re-focus higher
EUR/USD Strategy: Like the short side while under 1.3650.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

EUR/USD

*1.3570

1.3590

1.3625

*1.3650

1.3690

Price & Time Analysis: AUD/NZD

Price & Time: Time To Be Skeptical of Equity Market Strength

Charts Created using Marketscope – Prepared by Kristian Kerr

  • AUD/NZD fell to its lowest level in almost four months on Monday before reversing sharply off the 4th square root relationship of the year’s low near 1.0615
  • Our near-term trend bias is now lower in the cross while below 1.0675
  • The support area between 1.0615 and 1.0585 is critical and move below this zone is needed to signal that a more important leg lower is underway
  • An important cycle turn window related to the major low in 2005 is eyed here
  • A daily close over 1.0675 would turn us positive on the cross
AUD/NZD Strategy: Covered short positions into this turn window. A move over 1.0675 would favor longs.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

AUD/NZD

*1.0585

1.0615

1.0660

*1.0675

1.0700

Focus Chart of the Day: S&P 500

Price & Time: Time To Be Skeptical of Equity Market Strength

The second half of this week is shaping up to be quite important for the US equity market from a timing perspective. No less than three timing models that we follow are pointing to a potential reversal (or at least an attempt at one). Admittedly, identifying highs in the US equity market over the past few years has been a very dangerous business and we have tried to avoid it as much as possible. However, the setup going into this week is compelling - especially when taking into account other key factors like sentiment and positioning. There is certainly no shortage of potential catalysts over the next few days with the Fed Chair’s Humphrey Hawkins testimony and an option expiration. In the S&P 500 the zone between 1989 and 2006 looks key and is a clear potential idealized turnaround area. Any follow on weakness under 1948 would confirm that at least an intermediate-term high is in place.

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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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