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Talking Points

  • Euro still prone to a squeeze
  • USD/CAD nearing key downside pivot
  • USD/JPY key level ahead

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Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: USD/JPY

Price & Time: Will There Be A Euro Squeeze?

Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/JPY has moved steadily higher since rebounding off the 101.50 78.6% retracement of the July range at the beginning of the month
  • Our near-term trend bias is higher in the exchange rate while above 101.50
  • The 61.8% retracement of the April/May decline near 102.85 reamins a key upside pivot with a close above needed to usher in a period of meaningful strength
  • A minor cycle turn window is seen around the middle of the week
  • A move under 101.50 would turn us negative on the rate

USD/JPY Strategy: We like the long side while above 101.50.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

USD/JPY

*101.50

102.10

1.3375

*102.85

103.15

Price & Time Analysis: USD/CAD

Price & Time: Will There Be A Euro Squeeze?

Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/CAD has come under steady pressure since failing at the 161.8% projection of the 1st half July range near 1.0990
  • Our near-term trend bias will turn negative on a close under 1.0875
  • Key resistance is eyed around 1.0960
  • A minor cycle turn window is seen tomorrow
  • Only a close over 1.0960 re-instills upside momentum

USD/CAD Strategy: Square, but will look to go short on a close under 1.0875.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

USD/CAD

*.9260

.9285

1308

.9335

*.9360

Focus Chart of the Day: EUR/USD

Price & Time: Will There Be A Euro Squeeze?

We have been looking for a spell of cyclical European currency strength in August. It has indeed materialized in the NOK, SEK and even CHF. The euro has been a different story as the single currency can’t seem to get out of its own way with EUR/USD stuck in a 90 pip range for the better part of two weeks. The bigger picture looks negative for the single currency during the Northern Hemisphere Fall period and the recent inability to rally is probably a good sign that this broader negative view is the right one. However, given current levels of positioning and sentiment we can’t help but think the market is prone to some sort short squeeze over the remainder of this “positive” cyclical period into September. The August 8th high which coincides with an important Gann level related to the 2013 low looks to be an important near-term pivot with strength above this level needed to trigger something more meaningful on the upside. Weakness below 1.3330 would make us seriously question the possibility of a squeeze, but a close below 1.3300 is really needed to confirm a resumption of the broader downtrend.

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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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