Price & Time: Watching Gold For Clues in FX

Talking Points

• Another important cycle turn window approaching in Gold
• EUR/USD break important Gann support level
• AUD/USD stalls at key resistance

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Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: EUR/USD

Charts Created using Marketscope – Prepared by Kristian Kerr

• EUR/USD closed below the 2nd square root relationship of the year’s high near 1.3730 on Thursday
• Our near-term trend bias is lower in the Euro while below 1.3785
• A Gann angle line related to the 2013 low around 1.3710 is imoportant support with a daily close below setting up further weakness
• A minor cycle turn window is seen early next week
• Only a move back over 1.3785 would turn us positive on the exchange rate

EUR/USD Strategy: We like the short side while below 1.3785.

Price & Time Analysis: AUD/USD

Charts Created using Marketscope – Prepared by Kristian Kerr

• AUD/USD traded at its highest level since late March earlier this week before encountering resistance at the 12th square root relationship of the 2013 high near .9300
• Our near-term trend bias is higher in the Aussie while over .9160
• Traction over .9300 is needed to signal a resumption of the broader uptrend
• A very minor cycle turn window is seen today
• A clear move under .9160 would turn us negative on the exchange rate.

AUD/USD Strategy: We like the long side while over .9160.

Focus Chart of the Day: GOLD

Gold has come under pretty steady pressure since peaking on March 17th near 1392. Over the past few days the metal has consolidated around the 50% retracement of the December to March move higher near 1285, but no real upside traction has been achieved. Several important cyclical relationships are converging early next week and a turn looks probable. Heading into this cyclical turn window the recent action seems to favor a low - especially if the metal can squeeze out a new price low under 1277. Key support levels below there come into play around 1264 and 1245. The wrench in this possible scenario is today’s US Employment data. However, only a spike after the data over 1318 would seriously raise the possibility of a secondary high next week.

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

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.

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