Price & Time: Looking For USD To Reassert

Talking Points

• USD/JPY stalls at key Fibonacci level
• GOLD turns near important Gann level
• The 1.2585 area looks critical for EUR/USD

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Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: USD/JPY

Charts Created using Marketscope – Prepared by Kristian Kerr

• USD/JPY stalled around the 108.20 61.8% retracement of the month-to-date range last week
• Our near-term bias is positive on the exchange rate while above 105.90
• A close over 108.20 is needed to set off a new leg higher in USD/JPY
• A turn window is eyed over the next couple of days
• A close below 105.90 would turn us negative on USD/JPY.

USD/JPY Strategy: Square.

Price & Time Analysis: GOLD

Charts Created using Marketscope – Prepared by Kristian Kerr

• XAU/USD has come under pressure over the past few days after failing near the 2nd square root relationship of the year’s low in the 1251 area
• Our near-term trend bias is higher in the metal while above 1217
• A close over 1251 is needed to over the next few days to reinvigorate hopes of a more important push higher
• An important turn window is eyed mid-week
• A close under 1217 would turn us negative on the metal

XAU/USD Strategy: Square.

Focus Chart of the Day: EUR/USD

I was looking for choppy to higher trading in EUR/USD during the month of October and I think it is fair to say we have gotten it. The time has come, however, to start looking for a resumption of the broader downtrend. My work with cycles and other timing methods suggests the correction is close to running its course and the exchange rate should turn down this week or next week at the latest. A convergence of the 78.6% retracement of the month-to date range and the 1x1 Gann angle line drawn off the year’s low suggests 1.2585 is an important downside pivot to watch over the next few days. Traction under this level should confirm a resumption of the downtrend in place since May and set the stage for a fairly steady decline into December. Should the Fed surprise this week, the euro would obviously extend its correction a bit longer, but even this looks like it would be limited to next week on a cycle basis. Key resistance looks to be 1.2835.

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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.

--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

To contact Kristian, e-mail kkerr@fxcm.com. Follow me on Twitter @KKerrFX