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Talking Points

  • EUR/USD testing critical support area
  • Gold rebounds off Key Fib level
  • USD/JPY enters into important two week period

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Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: EUR/USD

Price & Time: USD/JPY Continues to Disappoint

Charts Created using Marketscope – Prepared by Kristian Kerr

  • EUR/USD traded at its lowest leve in over 5-months on Friday before rebounding off 1.3500
  • Our near-term trend bias is lower in the euro
  • Key support levels remain 1.3500 and 1.3460 with weakness below the latter required to signal the start of a more significant decline
  • A cycle turn window is eyed later this week
  • A move back over 1.3650 is required to relieve immediate downside pressures

EUR/USD Strategy: Like holding reduced short positions while below 1.3560.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

EUR/USD

*1.3460

1.3500

1.3515

1.3590

*1.3650

Price & Time Analysis: GOLD

Price & Time: USD/JPY Continues to Disappoint

Charts Created using Marketscope – Prepared by Kristian Kerr

  • GOLD found support last week at the 50% retracement of the June/July advance
  • Our near-term trend bias is higher in the metal while over 1280
  • Interim resistance remains near 1321, but a move through 1337 is needed to confirm an upside resumption
  • A minor cycle turn window is eyed Tuesday
  • A daily close under 1280 will turn us negative on the metal

GOLD Strategy: Like holding long positions against 1280.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

GOLD

*1280

1293

1316

1321

*1337

Focus Chart of the Day: USD/JPY

Price & Time: USD/JPY Continues to Disappoint

The second half of the month looks quite important for USD/JPY. The medium-term cyclical picture suggests the exchange rate will try to forge a low during this time. The first key period is eyed around the middle of this week and then there is another turn window around the end of the month. The real tricky part is determining where a reversal might try to take place. Risk certainly seems to be increasing for a final spike lower given the lack of upside momentum recently vis-à-vis global equities. However, with the exchange rate at the bottom of a well-defined 6-month range in a record low vol environment we can’t say with any certainty that it will break before moving higher. Given this lack of clarity of where a low might occur, we prefer to save the “mental capital” and just focus on a move through 102.25 (and then 102.85) as this would be strong evidence that an important move higher in underway. Until then it is just wait and see.

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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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